Forum Archive Index - April 2004
Please note usage of the Forum is subject to the Terms & Conditions.
[sharechat] Reply to roygbiv12 re: Gambling
You made the statement. "All the mining juniors you mentioned are pure
speculation, nothing more. You'd be better off going to the casino."
Which casino and which casino game? The house percentage varies from game to
game. Some Blackjack card counters can swing the house percentage to their
advantage, but they are very few and far between. Poker is played in some
casinos with the house taking a cut from the pool. Some experienced poker
players frequently win in casinos at the expense of other players at the
table, but once again, they're very few and far between. There are many
people who genuinely believe they have found a way to beat the house
percentage on various casino games (typically roulette) but needless to say,
the longer they play, the more they lose and the more they are likely to
lose. Something to do with the law of averages I believe.
As far as stocks and shares go (in simplistic terms) there is investing,
speculating and gambling.
If you purchase some shares (assuming you have carried out reasonable
background research) and that asset (shares) returns a regular income
(dividend yield) then typically such an activity is termed investing. The
asset may also increase or decrease in value over time as well, depending on
the timeframe and prevailing market conditions. However, all other things
being equal, if the asset does not return an income, then such an activity
is termed speculating.
There are many types of investing such as rental properties, bank deposits
and dividend yielding stocks. Similarly, examples of speculating would be
vacant land sections, art collections, and non-dividend yielding stocks. In
both cases, regardless of whether you use technical or fundamental analysis
(or both), the speculator is trying to achieve greater growth over time than
the investor, at the expense of foregoing a regular income stream.
Speculative stocks are typically more volatile, and carry a greater
risk/reward ratio than investment stocks.
Gambling on the other hand, often found in casinos, the TAB, and Lotto
shops, is simply giving up something you have (usually money) in the hope of
getting something better. Trying to beat the house percentage at a casino
roulette table or winning at Lotto is gambling, nothing more. The odds are
against you regardless of how long you play, and eventually over time, the
law of averages will ensure you come out a loser. Gambling can also be very
socially destructive. Other than people who have a controlled periodic
flutter, gambling is typically used by the less informed and less wealthy
grasping at straws in the hope of improving their lot in life. Unfortunately
most lose more, some become addicts, some commit suicide, and many innocent
people suffer in the aftermath.
The primary difference between investing or speculating compared to
gambling, is research as opposed to hope. The better your research the
better your asset return will be over time with investing or speculating.
However, this is not so for gambling, where your asset return will almost
certainly diminish over time.
Back to your opening statement. "All the mining juniors you mentioned are
pure speculation, nothing more. You'd be better off going to the casino."
Some of the mining juniors that I have mentioned are AVO, BRW, GBG, GTM,
PNA, RNG, and RSN. I accept that these are speculative (non-dividend
yielding stocks) but I do not accept that any of them are just gambling. If
you undertake appropriate research (which I assume you must have done) then
surely you must recognise their potential over time, subject to prevailing
I ask again, which game and which casino, offers better growth over time
than these mining juniors, and why?
The Mumbo Jumbo Filter
MSN Toolbar provides one-click access to Hotmail from any Web page – FREE
To remove yourself from this list, please use the form at