Recently, many brothers have asked me what is investment and what is speculation! Below are my personal views!
#特朗普就职百日 $BTC Investment focuses on long-term value. What you believe can be held for the long term can be understood as an investment. Investment emphasizes the future value of the assets you hold, not short-term volatility profits. In my opinion, the most typical investor is undoubtedly Buffett. His investment philosophy is long-term investment, with typical investments being Coca-Cola, See's Candies, etc.! Someone once asked him, 'Mr. Buffett, what kind of assets do you think are worth investing in?' He said, first, those he can understand; second, companies that cannot be replaced by any amount of money; and third, those he believes can continue to be profitable in the next ten or twenty years! Therefore, he chose Coca-Cola. He once said that no matter how much money you use, you cannot create another company that can compete with Coca-Cola! From his words, investment is about believing in something and trusting that it can bring you stable returns for a long time; this can be seen as an investment!
Speculation focuses on short-term profits, high returns, and high risks. The most typical speculator, in my opinion, is undoubtedly Jesse Livermore. With a middle school education, he was self-taught and spent his life demonstrating what speculation is through his three rises and falls. At its peak in 1929, he made $100 million in profit, while Buffett had not yet been born, making him the world’s richest man at that time and has been referred to as the greatest figure in U.S. stock history over the past century. Hence, he can be called a speculator. However, his life was not perfect; he ultimately left the stage through bankruptcy and suicide. But I believe this does not negate his achievements. From his trading strategies, he is a born speculator. Why do I say this? For a speculator, calm judgment, patient waiting, and decisive entry and exit are things few people can achieve. And when you turn an initial capital of $1,000 into $100 million, even now, many people would exit perfectly, not to mention the $100 million of 1929. Perhaps this belongs to a love for trading, but I believe it is more a sense of superiority because his only talent is trading; aside from that, he may not be much!
The above is my personal view on the difference between investment and speculation. I believe we are just speculators. Interested brothers can research the experiences of these two figures. Some of Livermore's strategies are still applicable today, but more importantly, it's about understanding the speculative mindset towards trading and the journey through bankruptcy, which is merely learning from the experiences of investment failures! Of course, I personally agree with Livermore a bit more. After all, in my view, trading is a game. In his words, trading has only one side; it is neither the bullish side nor the bearish side, but the correct side! Recently, there hasn't been much to say about the market; just patiently wait!
