It needed to be said again. For the objectives of financing are now forgotten --lost-- to the benefit of profiteering by financing. Thank you. I've been much disturbed by recent trends in MSM content which defends "speculators" who purportedly assist "price discovery" --of securities-- of securities issuers, corporations, whose commodites' pricing are purportedly defined by quantity supplied and quantity demanded at any point in time. Now:

I would define "investment" ... as the acquisition of ownership of productive assets.

"Speculation" or "Gambling" ... is bought and sold (not necessarily in that order) in the expectation of profit.

In the first instance, security price is the product of the ongoing concern. A security is issued in order to finance a specific, operating purpose. Debenture, which is not ownership, is issued to finance a specific, operating purpose including substitue cash flow from operating revenue. Accordingly, bondholders possess no claim on productive assets aside from principal at "risk" and opportunity cost, or interest, or cost of capital, or "risk rate."

Speculation is an arbitrary market in which securities and their derivatives obtain a price at some time-value equivalent to any pair of counter-party knowledge (perceived value) of the securitized asset, a corporate operation operations in toto.

It is the corporation's operations which buyers must always evaluate, irrespective of security pricing, in order to forcast and retain proceeds from ownership of productive assets. Stiglitz notes here in an OpEd titled "Falling Down" which recalled, in me, the novel Things Fall Apart

If the Great Depression undermined our confidence in macroeconomics (the ability to maintain full employment, price stability, and sustained growth), it is our confidence in microeconomics (the ability of markets and firms to allocate labor and capital efficiently) that is now being destroyed.

His definition of microeconomics is incorrect in so far as it presumes a relationship between "markets" (securities exchanges) and "firms". Microeconomics so far as I am concerned in the study and knowledge of behaviors within a firm in relation to behaviors of a firm's commodity buyers (a market) who behave independent of firm operations. More generously, microeconomic study categorizes similar firms by market size and market value to form an industry.

Consider also this OpEd by Stiglitz

Diversity is the key to economic and political evolution.

I think there are people who like to gamble, irrespective of whether they win or lose, because they enjoy and maybe become addicted to the adrenaline rush of anticipating the result. Just as football supporters return each week because for 90 minutes they can be involved in something they can care passionately about, gamblers use money to create a sense of involvement.

I am not like that. No, I don't like to lose (does anyone ?) but actually I don't enjoy the anticipation either. If I care too much, and here I'm thinking about football where I've experienced it, then it's a genuine angst I wish I was freed from. I have once or twice played pool for money and it spoils my enjoyment. I have once or twice gambled and just felt I was throwing my money away, winning would not have changed that perception.

Having said all that I do buy lottery tickets. I guess I have the same attitude to crime. It's not worth risking jail for less than a million, so I'm "honest" cos nicking petty cash is pathetic. It's only worth it if it's a life-changing possibility. Most gambling isn't remotely life-changing, it's just a 5 minute diversion.

keep to the Fen Causeway

Analyzing mostly stocks, I felt a lot like a gambler as I studied all the fundamentals, angles, odds, probabilities, charts, etc. and then on the best days I had a clear, strong gut feeling of joy or fear.

It´s very strange thinking back on it.  

Our knowledge has surpassed our wisdom. --Charu Saxena.