Is there a hard threshold? Do high risk investments such as penny stocks qualify as gambling? Do low risk investments? Annuities? Bonds? CDs?
This comment got me wondering.
Is it more to do with the venue? Stock markets and real estate vs casinos and the lottery?
Were the MIT Blackjack Team gambling or investing?
Is this just another semantic hotdogs are sandwiches discussion or is there an agreed threshold?
If you’re talking about stock picking, hard disagree. Emotion has nothing to do with it whether or not it’s gambling.
If picking stocks was anything but a gamble portfolio managers wouldn’t have such a god awful track record.
Just because you are wrong about your expected value calculations (or were right but the actual return was on the lower end of the range) and have made a bad investment doesn’t change the fact that it was an investment because you were doing it for the returns.
In short, performance doesn’t matter for this distinction, at least IMO.
You can dress it up in whatever language you want but when nobody is able to consistently beat the market it looks a hell of a lot like gambling.