Difference Between Investment And Gambling Ppt
Investment can also be well known from gambling and some of the examples of gambling are card games, lotteries, and horse race. Gambling includes high risk and not only for high returns but also the associated excitement and it is unplanned, unscientific without the knowledge of the nature of the risk involved.
- The main difference between speculating and investing is the amount of of risk undertaken in the trade. Typically, high-risk trades that are almost akin to gambling fall under the umbrella of speculation, whereas lower-risk investments based on fundamentals and analysis fall into the category of investing.
- Sep 20, 2018 The odds are in your favor Anyone familiar with gambling has likely heard the phrase “the house always wins.” Since casinos are in the business of making money for themselves, that means the scales are tipped in favor of the dealers. Investing is generally a much more effective way of making your money work for you.
Investment is defined as the employment of funds to acquire certain assets after due diligence for mid to long period. Investments deal is generally done for real assets. Most of the people are nervous about investing money in the market because they believe that investing has more to do with luck.
People also believe their ability to earn a return on their investment comes down to pure chance such as the flip of a card or roll of the dice. Investment is being done for the creation of wealth and also investments are considered as gambling.
Investors and gamblers both are want to put more money in their pockets and also the investing and gambling could not be more different. If an individual is investing without fundamental analysis, based on market sentiments and if an individual who invests with proper fundamental analysis for a longer period of duration can be defined as an investor.
Wheel of Wishes is the latest addition to the jackpot family of casino online and mobile slots. With 5 reels and 10 paylines, this game features Power Spins, a Scatter and a Wild, as well as a Wheel of Wishes Ppt On Difference Between Investment And Gambling Jackpot Bonus, with 4 different progressive jackpots that can be won at any time. Difference Between Investment And Gambling Slideshare, tatuagem jogo de poker, hacienda y poker, jack wastes poker. Oct 28, 2015 According to one definition, investing is, “the act of committing money or capital to an endeavor with the expectation of obtaining additional income or profit.” What this definition lacks is the real difference between investing and gamblingresearch.
Investment Vs gambling:
Here you are going to see the difference, let’s see about the difference between gambling and investing,
Leverages: Investors are allocating money from their resources for the investment and this applies mainly to assets to the equity market. Generally, gamblers are allocated their own money and bet for entertainment.
Price of asset: Gambling id based upon odds and bets are placed only on assumptions and at the same time investor does not look at the price of the asset rather it looks at the asset itself to determine the decision to allocate money now to get money back later on.
Time horizon: Gambler placed a bet for immediate gain and on the other hand investors allocate money for a particular asset for a longer period.
Risk analysis: Investors do have long term risk and return perspective and also they will rely on the fundamental analysis of financials. This can affect the price of the asset class and their decision to invest in a particular asset. It is based upon the certain fundamental values associated with the asset.
But the gambler risk entire capital on bet and relay mainly on luck and they are highest risk-takers and ready to lose original investment also.
Financial profile or funds availability: Investment is stock trading gambling, and their funds or looking to create wealth and on the other hand gambling has wealth and looking to have fun.
Finally, invest wisely after proper analysis of the company to secure hard money for fairly good chances for the creation of wealth and gambling should be avoided, in most of the cases gambling is not legal. These are the basic thing about investment vs gambling and it will be useful for you before investment.
Peter Lynch once said, “When people discover they are no good at baseball or hockey, they put away their bats and their skates and they take up amateur golf or stamp collecting or gardening. But when people discover they are no good at picking stocks, they are likely to continue to do it anyway.”
In traditional sports, it’s easy to measure if you are good based on batting average, goals scored, or other statistics. In the stock market, some investors seem to believe their next great stock idea will be the big winner that makes up for all of their losers. The question every investor needs to answer is…are you investing or gambling?
What is Investing?
According to one definition, investing is, “the act of committing money or capital to an endeavor with the expectation of obtaining additional income or profit.” What this definition lacks is the real difference between investing and gambling…research. Unfortunately, there is a huge crowd of amateur investors that ignore Peter Lynch’s sound advice, “a share is not a lottery ticket…it’s part ownership of a business.”
Many “investors” think investing in the stock market is like walking into a casino. They throw money at a stock, or a basket of stocks, based on a rumor, tip, or something they believe. They do very little research (if any) into each company, and many times, they lose just like at a casino. For the amount of “investing” they are doing, they may as well have gone to Atlantic City and bet on number 13 at the roulette wheel.
Difference Between Investment And Gambling Slideshare
While gambling involves random chance, investing requires some research. Lest anyone get intimidated, this type of research doesn’t require a PhD, and in some cases can be done in a short amount of time. If you are interested in a company, the first place many real investors should go is the company’s most recent quarterly report. Beyond this, analyzing things like the company’s last annual report, balance sheet, cash flow statement, and income statement can be instructive.
More thorough research, might involve reading the company’s last few conference call transcripts, and even calling the company to ask questions. Finally, the investor might look at some valuation comparisons of the stock compared to its industry peers, or historical norms. Unlike pulling the handle on a slot machine, in the stock market, a little bit of research can increase your chances of making money significantly.
Timing is Everything…or is it?
An additional hurdle that many investors must try to overcome is the idea that some people are born market timers. The truth is, there is no such thing as an investor who is consistently great at timing the market. Investors do their research, and attempt to pay a fair valuation based on their assumptions. Real investors ignore the market and focus on the company.
A few case studies are instructive, to show how an investor can either make or lose a lot of money by trying to time the market. First, let’s say you believed in October 2011, that Netflix (NASDAQ: NFLX) was going to be the king of online video. The stock was valued at a split-adjusted price of around $12 a share. You decided to invest $10,000, and purchased 832 shares. Today, that $10,000 investment is worth more than $80,000, or an annual rate of return of just under 70%.
However, let’s say you decided to buy into Netflix a bit earlier in July 2011. With the same conviction as the first investor, you bought shares when they were at $42.16. Just a year later, you get nervous because you’re losing money. Rather than focusing on the company, you abandon your investment a year later at $8.42 a share, a negative 34% annual rate of return.
The difference between the investor who made a huge profit in Netflix, and the one who suffered significant losses was patience and conviction. Netflix’s financial and operating profile didn’t change, the stock market simply mispriced the opportunity in 2012.
In the second scenario, an investor decided that Keurig Green Mountain (NASDAQ: GMCR) would change the coffee industry forever. In October 2011, the company’s stock was around $71 a share, and this investor chose to buy $10,000 worth. That same investor has been on a wild ride over the last few years, and has witnessed their investment decline to about $7,800. With an annual rate of return of negative 6%, the company has some challenges and the market seems to be pricing these issues accordingly.
That being said, an investor in December 2010, might have thought that Green Mountain was a great company as well. With the stock at $32.50 a share, the investor decided to buy. Just nine months later, Green Mountain’s stock was riding high at $108, and the short-term investor sells out with an annual rate of return of nearly 400%. This investor might believe that Green Mountain is one of the best investments they ever made.
The Answer
The point is, in the short-term, a stock can move up or down without correlation to the strength of the business. Over the long-term, investors might experience volatility, as stocks move based on supply and demand – not necessarily intrinsic value.
The bottom line is, if you’re a gambler you’re probably better off taking some of your money and having fun in Las Vegas. Hopefully you’ll have enough left to take your serious money, and put it in the hands of a qualified financial advisor.
However, if you’re interested in becoming a better investor, do some research into the company or companies you are interested in. When you’ve decided to put your money to work, make sure you keep up with the story and buy or sell based on the strength of the business. Sometimes, the difference between gambling and investing is a little bit of research, and the stomach to stick to your playbook.
Difference Between Investment And Gambling Ppt Economics
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