Trading the stockmarket (NO Referrals)

[hurfdurf]

This whole gambling thing is very interesting.

How much DD can you do before it becomes an investment, and if it goes **** up, does that mean it wasn’t a gamble, you were just wrong?

Im wondering this myself now because a good friend of mine is a hardcore gambling addict, and all this Bitcoin and GME stuff is making the news, but I’m not sure if it’s just another avenue for gambling... doesn’t help some kid at his work turned £30k into £120k on bit coin.

 

[Jono8]

Yes, or that it is not possible to know or reasonably guess the expected outcome on average. I am not attempting to change the entire definition of it. Its important that someone says X, then explains what they mean, which is what i am trying to do, but other people simply only skim read key words or statements.

So by that logic, if Manchester City are playing West Brom, it isn't gambling if you bet on Manchester City (because they should win and you can reasonably expect Manchester City to win)?

 

[ninjabib]

So by that logic, if Manchester City are playing West Brom, it isn't gambling if you bet on Manchester City (because they should win and you can reasonably expect Manchester City to win)?

Plus we (WBA) held them to a 1-1 draw at their place

 

[Minusorange]

So by that logic, if Manchester City are playing West Brom, it isn't gambling if you bet on Manchester City (because they should win and you can reasonably expect Manchester City to win)?

Likewise horse racing isn't gambling because you can form an educated guess on which horse will win based on the wealth of information presented to you in the form of previous form, weight, jockey, trainer, track length, track quality etc

So nothing is gambling it's all investing if you do your research first apart from crypto, that's gambling for sure because platinum thinks it's worthless

 

[Jono8]

Likewise horse racing isn't gambling because you can form an educated guess on which horse will win based on the wealth of information presented to you in the form of previous form, weight, jockey, trainer, track length, track quality etc

So nothing is gambling it's all investing if you do your research first apart from crypto, that's gambling for sure because platinum thinks it's worthless

Indeed. It is strange logic.

 

[platinum87]

So by that logic, if Manchester City are playing West Brom, it isn't gambling if you bet on Manchester City (because they should win and you can reasonably expect Manchester City to win)?

Yes but thats priced in to the odds, minus the bookies take, so all options are negative expected value, thus gambling.

Likewise horse racing isn't gambling because you can form an educated guess on which horse will win based on the wealth of information presented to you in the form of previous form, weight, jockey, trainer, track length, track quality etc

So nothing is gambling it's all investing if you do your research first apart from crypto, that's gambling for sure because platinum thinks it's worthless

Yes but thats priced in to the odds, minus the bookies take, so all options are negative expected value, thus gambling.

You might be able to use some method to better calculate odds and have an advantage, but that is outright banned to do. Walking into a casino with lasers to calculate roulette physics and then make bets on it, is 100% not gambling. And they would not let you do that.

 

[Jono8]

Yes but thats priced in to the odds, minus the bookies take, so all options are negative expected value, thus gambling.

Honestly, there is little difference between researching which football team is better and then making a bet on that team because you expect them to win, and researching which company looks like it will become more successful and earn more money and investing in it.

Neither outcome is guaranteed because no one knows the future. Even the most rigorous of research/DD is no guarantee of anything. For example, you could identify an up and coming airline for example, only for them to have a airline crash due to negligence and go bankrupt.

What it all boils down to is you putting your money down on an outcome that you think will make you more money.

 

[nightwish]

https://investinglessons.substack.com/p/are-you-trading-or-gambling

 

[dwarf]

I think this gambling argument goes both ways honestly. Investing in the stock market is inherently risky but traditional thought is that you invest where you expect a return that reflects this risk.

The are broadly two traditional investing styles. Value and Growth. Value investors look for stocks they believe are undervalued by the market (value stocks), while growth investors seek stocks that they think will deliver better-than-average returns (growth stocks). Value investors look for companies that have already earned their stripes and have a stock price that’s lower than it should be (and may rise again to reflect that). Growth investors look for companies with future potential and expect the stock price to increase (even if it’s already relatively high) as the companies reach or exceed that potential. Same desired destination, different ways of getting there. (more here)

Both these styles rely a degree of due diligence being performed by the investor that gives them a basis from which to inform their investing decision. But they still could be wrong due to incorrect assumptions or unforeseen external events, and they could lose money. However, instruments exist to reduce their exposure to this risk (stop loss, stock options, futures etc.). I would argue this investment approach is not gambling, but still has a degree of risk. Other people will still see this as gambling however as different people have different risk tolerances.

Investing in a stock based purely on a gut feeling without any degree of due diligence on the underlying asset I would argue is gambling. In this situation, if the price goes up and you make money that was due to luck rather than any confirmation of an informed hypothesis.

But you can also take a completely different view. It could be argued investing, even on gut feeling, is not the same as gambling because investing increases the overall wealth of an economy, while gambling merely takes money from a loser and gives it to a winner. With gambling no value is ever created, whereas the overall wealth of an economy increases through investing. As companies compete, they increase productivity and develop products that improve lives.

 

[platinum87]

Honestly, there is little difference between researching which football team is better and then making a bet on that team because you expect them to win, and researching which company looks like it will become more successful and earn more money and investing in it.

Neither outcome is guaranteed because no one knows the future. Even the most rigorous of research/DD is no guarantee of anything. For example, you could identify an up and coming airline for example, only for them to have a airline crash due to negligence and go bankrupt.

What it all boils down to is you putting your money down on an outcome that you think will make you more money.

It comes down to the ability to actually correctly value. If you can claim to value odds on games, and calculate better odds, then it would not be gambling, then it could be the same.

I do not think that is true, however in stocks many people have clearly proven that they can, who outperform the markets consistently.

https://investinglessons.substack.com/p/are-you-trading-or-gambling

Yep.

Bet sizing, or bankroll management is extremely important. My friend who played poker was equal skill to me, but he would simply yolo to the highest stakes, which always results in going to $0 after 1-2 days maximum.

Same is true with stocks. Most will cap a stock at 5%

 

[platinum87]

I think this gambling argument goes both ways honestly.

My argument is not based on the difference of risk between people. Only that gambling is something that is purely negative risk, or that the outcome cannot be guessed.

All you have to say for me to not say it's not gambling, is that X company is worth 10, its price is 9, i am buying.

Gambling is when you say its value is 10, its price is 200, im buying anyway because yolo. (GME)

Additionally if you just randomly pick a share without valuing it, thats gambling too.

Plenty of people here bought tesla when i believed it was overvalued, it still is, and it was. But i did not say any of them were gambling, as most believed the value was higher than the price.

 

[dwarf]

Yes, I think we are broadly of the same opinion. Best not to disclose my TSLA position

 

[Delta3D]

Seeing some lovely short term gains on SNGX now

Hopefully plenty more to come in the next month

 

[arknor]

This whole gambling thing is very interesting.

How much DD can you do before it becomes an investment, and if it goes **** up, does that mean it wasn’t a gamble, you were just wrong?

Im wondering this myself now because a good friend of mine is a hardcore gambling addict, and all this Bitcoin and GME stuff is making the news, but I’m not sure if it’s just another avenue for gambling... doesn’t help some kid at his work turned £30k into £120k on bit coin.

low risk , low returns
high risk , high returns ( but still bases on fundamentals)

then you have stuff like GME which basically became gambling, no one knows why it's going up or if it will continue to ,it's pretty much a game of chance at this point and not even based on speculation

TSLA honestly is probably more volatile and risky than bitcoin, but at least it's based on something, results the company is likely never able to achieve at the current P/E ratio
but I guess people are buying in to the brand value rather than the products value

 

[413x]

This whole gambling thing is very interesting.

How much DD can you do before it becomes an investment, and if it goes **** up, does that mean it wasn’t a gamble, you were just wrong?

Im wondering this myself now because a good friend of mine is a hardcore gambling addict, and all this Bitcoin and GME stuff is making the news, but I’m not sure if it’s just another avenue for gambling... doesn’t help some kid at his work turned £30k into £120k on bit coin.

Gamble for me is gme, bitcoin in the early days.
When there is pure equal chance of success as failure.

Interestingly, this gamble is by far the most success I've had making money in this way.

But still, a gamble.


My buys this year, yes they've had risk, but
-I thought covid made them over sold
-I thought they would bounce back


But yea . UK shares are pretty dull. In normal times, nothing excites

 

[caff]

But yea . UK shares are pretty dull. In normal times, nothing excites

Generally - but MKS (Marks and Spencer) has done well in the last month. Kind of regretting selling at 8% up but I was a bit worried about volatility on retail.

 

[413x]

Generally - but MKS (Marks and Spencer) has done well in the last month. Kind of regretting selling at 8% up but I was a bit worried about volatility on retail.

yes. Same. Covid has created massive opportunities that do not arise otherwise.

 

[PureAppleJuice]

UK growth (in terms of the markets) is pretty poor and has been for well over a decade. Look at where the FTSE was before 2008 and where it is now. Same with the FSTE All share. Then compare it to the S&P500 or even the Dax, and the growth is pretty low.

That's true, but do look at the dividends of the major UK stocks. I think the US market is a better play for the under 40s but for projections above that age and beyond the FTSE isn't so bad at face value.

 

[DireEmblem]

So what are folks thoughts for this year?

Mine are:
CERES Power buy long term sub £12, sell short term >£16
CHRYsalis Investment Trust - keep an eye on their placement and what they are raising funds for. Then consider reentry around the £2 mark.
SMT Scottish Mortgage Trust - Good basket of companies, long term hold and buy any dips sub £11.
NG National Grid - stay well clear.
Morrisons - Interesting dividend play with 10-20% short term capital upside.
MWE MTI Wireless Edge - keep an eye on this stock.
HUR ricane Energy - keep an eye out on RNS feed for potential exit. I bought in last year before they wrote off 90% of their reserves at 8.2p, thinking worst case I would break even if all went Pete tong, I am now waiting to break even(I never sell investments at a loss).
PINS - Pinterest - tempted to top up on recent dip. Anything Sub $70, above that is a hold until it reaches $150.

 

[Surveyor]

HUR ricane Energy - keep an eye out on RNS feed for potential exit. I bought in last year before they wrote off 90% of their reserves at 8.2p, thinking worst case I would break even if all went Pete tong, I am now waiting to break even(I never sell investments at a loss).

What will you do if they never recover to your break even point?