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I bet the better off do gamble on the financial markets though
prewett
There are many ways to use the financial markets that are not gambling. Buying an index fund or Coca-Cola isn’t gambling; it is not even very risky. Nor are individual stocks gambling, as you can get a reasonable idea of what a company’s price ought to be and how it is likely to perform in the future, at least for well-established companies. It’s also harder to get into debt, as long as you don’t short, because you can only spend money you have, and the stock does not become worthless if your analysis is wrong. (At least, there are warning signs)

Now day-trading? I consider that gambling, because any particular day’s price movement is a lot closer to random.

ryandrake
Buying a stock or mutual fund is the very definition of gambling: placing a monetary bet on an unknown future event. Just because this activity has historically had a +EV, doesn't make it any less gambling.
fngjdflmdflg
By this definition prime loans are also gambling. When you bet on something risky then you are gambling. When you bet on something not risky you are not gambling. Also consider that not investing will generally lose money over time due to things like inflation. If we define the goal to be holding as much value as we can, holding dollars is more risky than investing in many stocks (or bonds, which also have a risk of defaulting). A better definition of gambling is something like "taking unnecessary and unproductive risks."
ryandrake
I'm not sure I buy any definition of gambling that depends on the outcome. If you lose money or tend to lose money, then it's gambling, but if you win money or tend to win money, then we change the name to "investing?" Risk includes upside and downside risk.
fngjdflmdflg
It doesn't depend on the outcome. If a bank only does prime loans and spreads out it's loans multiple borrowers, has a good reserve ratio etc. and still loses it all, that still wasn't gambling. This is more clear if you consider that storing value in money is also risky. When you get paid in a currency, you automatically begin investing in it at the same time. This is even more clear with foreign currencies. If you got paid $1 million in Turkish Lyra and do not store that value somewhere else, that is more gambling-like than putting it in the S&P. I guess you can say that any time you increase the amount of risk in an investment to get more reward you are gambling. But you can invest in something other than USD with the same risk but with greater reward. For example you can invest it in US bonds (over multiple issues) which has a similar risk to the USD but a greater reward. Still, under such a definition, any business is gambling. We can accept that, but then we have no word that differentiates owning a grocery store from betting all your money on a coin flip, so then the word "gambling" becomes much less useful or really useless in my opinion.
Mr_Minderbinder
Purchasing a business or parts thereof is not “gambling” any more than purchasing a house is “gambling”. People purchase them (or are supposed to) for the value they provide either through income or asset appreciation in the case of businesses or shelter in the case of the house and not for the singular promise of some winning outcome unlike games of chance. The only expectation is that the asset purchased will continue to provide value throughout the period of ownership which is no more or less than what you would expect of many other assets or goods you might purchase and none of this is contingent on mere chance alone. Just because somebody quotes a ridiculously high or low price does not necessarily mean the intrinsic value of the asset has changed. Overpaying for an asset is not the same as losing money to a slot machine. Have I “lost money gambling” if I buy something in a store the day before it gets discounted? These are just risks that exist in any market. Do not confuse this issue just because some have decided to use them as mere vehicles for price speculation. People speculate on the price of eggs, oil and gold as well but that does not mean buying eggs for breakfast, fuel for your car or a gold necklace for your wife is “gambling”.
jowea
Is it gambling if it has a +EV?
psychoslave
Those who already took 99% of the pie can safely bet on every possible outcome.

Most can avoid to lose completely while alive, but they have no path to a winning position, and others are trapped in a situation where it's so hard to go down to a net lost that they lose ability to understand that individual hard work and wiseness is not going to defeat societal asymetries.

garbawarb
Financial markets produce a net positive outcome for investors (gamblers), no? The average rate of return in the S&P500 is about 10% and it's considered the baseline for thr stock market.
ceejayoz
The gambling equivalent is day trading, not holding VOO for a decade.
JumpCrisscross
> bet the better off do gamble on the financial markets though

Much less. Something I’ve noticed is the parents of the wealthy teaching their children to invest versus e.g. day trade. In middle class or poor households, on the other hand, it’s not uncommon for the kid to be trading crypto instead.

xphos
This is a misleading judgment the expectations out of the stock market being that the investments produce money generally speaking are expectation positive. Gambling is expectation negative always. That's the defining difference in my opinion.

Can you lose money in both absolutely but only actual investments have historically positive expectations. The stock market has had net growth of 7%+ on average in the last 100 years. Gambling has not increased the gamblers pockets at all its only shrunk there pockets

kelseyfrog
When they do it, it's gambling. When we do it, it's investing.
nine_k
Investing is putting money into (hopefully) productive use, like a company with revenue, in an expectation of a return.

Gambling is basically redistributing money according to a random numbers generator, It's a negative sum game (because the house takes its fee), but a surprise positive spike game. That spike forms an addiction in the less fortunate.

JumpCrisscross
> Investing is putting money into (hopefully) productive use, like a company with revenue, in an expectation of a return

The big differences are time horizon, addiction and expectations.

The longer the term, the less actively one must watch it and the lower the expected returns, the more likely it’s investing. The shorter the expected turnaround, the more closely one watches numbers go up and down, and the more one is focused on turning multiples than yields, the more likely it’s gambling.

Any stochastic process can produce gambling behaviour. Only a positive-sum game can facilitate investing.

ryandrake
When you buy a stock, you're not contributing it to the company's productive use. If I buy $1000 of MSFT, Microsoft doesn't get an extra $1000 in their bank account to invest in their business. That $1000 is going to another bettor to settle his previous bet, and at some point in the future, I'll sell and get an unknown amount of money to settle my bet. Just because historically betting on the stock market has been +EV doesn't mean it's not still gambling.
JumpCrisscross
> When you buy a stock, you're not contributing it to the company's productive use

You are marginally reducing their cost of capital.

ryandrake
Sure, but that's pretty indirect and a far cry from "putting the money to productive use." Unless you're an early investor or IPO participant, your actual money is not being directly put to productive use by the company you are "investing" in.
2 More Comments →
jogjayr
If you buy MSFT specifically you'll get regular, fairly predictable dividend payments and not just an unknown amount of money in the future.

MSFT goes up a tiny fraction when you buy. That means MSFT employees with stock grants get a tiny "raise" courtesy of you and with no cost to the company. Microsoft can also use their more expensive stock to make acquisitions. So you are contributing to the company's productive use in at least 2 ways if you buy its stock.

Buying MSFT doesn't meet the criteria to be called gambling, for me.

victorbjorklund
The difference is investing has a positive expected return. Betting against the house does not.
kelseyfrog
> investing has a positive expected return

Can you tell me more about this. I've never heard of it before. Is there a theorem?

SXX
Except everyone on financial markets try to sell idea that you can "learn" and actively trade on their platforma and make living of it.

Which make it no diffetent for average Joe than gambling.

tstrimple
Plus it's fun and "dangerous" to slum it with the plebs on occasion. But you don't want that shit close to where you live.

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