Investing vs gambling

I was watching CNBC today and they were discussing Prediction Markets. Someone made the comment that gambling isn’t investing, which is true. However, I’ve heard some people state that investing is a form of gambling. In some ways I can see their point, you lay some money on a stock and you can’t be 100% sure if you’re going to make money or lose money, ie you’re going to win or you’re going to lose. Now there’s no house edge in investing and you can do research and analysis that can help you determine your outcome, but you can do the same for table games and sports betting. So what do you guys think, is investing a form of gambling?

A couple decades ago you had to have minimum amounts to invest and the stock broker would take a large cut. Now with Robin Hood and the like, the cut isn't so pernicious. Yes, investing is gambling. Bonds turn to junk, stocks crash overnight much like a slot machine on a bad run. What is it, 90% of stock market players are losers? The markets have been heavily manipulated in recent years, so only the people with the nerve to stay in the market can catch a ride up in value. Sane people would just stay out of the market and collect their 5% interest somewhere else. Only half of Americans have investments, the rest are not in the market. Why the market keeps defying gravity and fundamentals and going up has little to do with sound fundamentals. We've got meme stocks, and other stocks that are beyond way over-valued, so how do you play on those? Elon is losing hundreds of billions of dollars a week lately, how about everybody else? It's all paper profits until you cash-out, much like a TITO when you hit the button and have to make a taxable transaction out of it.

You can look on your phone and see that markets have had an extremely good run in the last 10-15 years unlike anything in history. It seems boomers are ramping up their wealth.

If you just keep cash and don't invest in anything, you'll be losing out to inflation. There's no way anything is keeping up with the 50% to 100%+ inflation in the last 6 years, and that is what investing is supposed to help you catch up on. So even investing won't catch you up with inflation when it was under 2%.

I say find a good table game and learn how to turn $1,000 into a few hundred thousand in a year or three without getting ejected.

Quote: technics

I was watching CNBC today and they were discussing Prediction Markets. Someone made the comment that gambling isn’t investing, which is true. However, I’ve heard some people state that investing is a form of gambling. In some ways I can see their point, you lay some money on a stock and you can’t be 100% sure if you’re going to make money or lose money, ie you’re going to win or you’re going to lose. Now there’s no house edge in investing and you can do research and analysis that can help you determine your outcome, but you can do the same for table games and sports betting. So what do you guys think, is investing a form of gambling?
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Sort of. But if you believe history, ‘regular’ stock investing is +EV gambling. I believe that each stock/ETF purchase I make is +EV. But only by a small amount per year. So it is ‘gambling’ in the sense you certainly can lose money.

As per your ‘research and analysis’ comment, remember if your analysis is the stock is underpriced and you should buy, half the people disagree with you. What makes you think your research and analysis is better than the guy offloading the stock to you?

Anyone who thinks 90% of stock investors lose money is deep in the Valley of Wrong
There are speculative stocks that might.seem like gambling, but investing by buying a diverse portfolio on a regular basis is not a gamble.
Buying $1000 worth of a internet startup might be gambling but investing $100 weekly in a tracking ETF for twenty years isn't.

Nothing we do in our lives is without uncertainty.

"Gambling" is a near pejorative term that is used for a risk you take that makes someone else nervous.

To me, gambling is betting. When you bet, the other side is saying you are wrong and backing its opinion with money.
When I buy a stock, I am trusting that the company will grow and telling them I believe they will grow my money.
Do they seem similar?

The expected return on gambling is always negative.

Investing knowledgeably based on research and current conditions is done with a positive expectation.

in addition to a built-in house edge, the PMs necessitate active trading to profit. The typical things we call investments like stocks and bonds do not require that. When done right, it's neither investing, nor gambling; it's labor.

Quote: Tanko

The expected return on gambling is always negative.

Investing knowledgeably based on research and current conditions is done with a positive expectation.
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Is a non-raked poker game somehow not gambling?

One of the definitions of investment is the surrounding of a place by a hostile force in order to besiege it and ransack it. So when I attack an online casino from all angles, that could be considered an 'investment'.

But I don't consider myself an investor or a gambler. I am a contractor.

The promotions department of a casino will offer me terms of a contract. The contract stipulates that they will pay me a specified amount if I perform a certain task or reach a certain goal. It is not my responsibility to tell them that the contract terms make no financial sense from their point of view. I decide whether I want to to reject the contract as inherently unprofitable or accept the contract and perform the task. My decision is based on whether I can perform the requirements of the contract with less theoretical loss than the amount of money they are offering me, plus some profit margin.

Most contracts have time limits. The terms are sometimes pay-as-you-go (points and cashback), but other times they will pay me only when I hit certain milestones (play to earn). Very often, the contract specifies exactly which particular game I need to play. Sometimes, they will pay me only when I lose (loss rebate). Sometimes, they will pay me only if I play more than other players (leaderboard: a contingent contract for which is hard to assign a reasonable estimate of theoretical loss). Sometimes, I am willing to do the work for free because the game is +EV (variable state, progressives, etc.).

For the most part, I am an honest contractor. I finish the job on time and I fulfill all of the terms to the letter of the contract. I try not to leave a mess or even be noticed while I am working. My aim is to do such a good job that I am offered many contracts in the future.

Like many contractors, I often lose money on a contract where the margins are thin. This is business risk, not gambling. At the end of the quarter, I am almost always deeply in the black.

Buying a single stock is gambling
Buying diversified stock portfolio short term is gambling
Buying a diversified portfolio longterm is investing. Risk is not zero though
I think you can say trading is more gambling than investing though there is such a thing as needing to dump a stock

I was hoping that @wizard would chime in