A brother asked, what is the essential difference between speculation, investment, and gambling?

"Why am I still stuck even though I hold value coins for a long time?"

"Does watching the market every day to swing trade and engage in contracts count as investment?"

These questions actually confuse three completely different rules of wealth games. Let's break down this confusion through three life scenarios.

🔺First Scenario: Old Liu's Apple Orchard

Old Liu spent three years studying the climate and soil, took out a loan to cultivate barren hills to plant apple trees. He researches grafting techniques every day, records rainfall, and even lights fires on frost nights to prevent freeze. In the fifth year, the orchard finally yields a bountiful harvest, and even with market price fluctuations, he can still obtain stable income through quality.

This is just like value investors—building a margin of safety with deep understanding, allowing time to be an ally. As Graham said: "Investment is based on in-depth analysis to ensure the safety of the principal and obtain appropriate returns."

🔺Second Scenario: Xiao Li's Fruit Stand

Xiao Li noticed that a typhoon caused the price of bananas to soar, so he borrowed money to stockpile mangoes. He doesn't need to know the mango varieties or care about planting techniques; he only calculates how to quickly flip them for profit by taking advantage of price differences.

This kind of “passing the parcel” operation is precisely the “castle in the air theory” proposed by Keynes—just find a more foolish buyer to take over. Just like typical altcoins, when the music stops, the last holder often pays a painful price.

🔺Third Scenario: Xiao Wang's Lottery Dream

Xiao Wang spends thirty percent of his salary on lottery tickets, firmly believing that “wealth comes from risks.” He is unaware that the mathematical expectation of each lottery ticket is negative and does not study probability distributions, purely entrusting his fate to a random number generator.

This behavior pattern is no different from a gambler sitting in a casino betting on high or low—exchanging certain losses for uncertain huge profits, which is essentially a chronic form of statistical suicide.

These three scenarios reveal the essential differences: investors create value, speculators transfer value, and gamblers consume value.

When you are ready to buy a certain asset, you might as well ask yourself three questions:

Do I clearly understand its true value?

Is my return coming from the growth of the enterprise or market sentiment?

Can I bear the loss in the worst-case scenario?

The answers to these three questions will illuminate the essence of your actions like a mirror.

Let's encourage each other!