Due to the No Arbitrage Principle, in theory, there should always be risk when you invest, however investing is seen as smart common sense which every adult needs to do whereas gambling is a poisonous addiction we need to curb, what’s the difference? To me, it seems that only when the market is exploitable and not fair, is there a true difference, apart from the immediacy of the results of many types of gambles vs the drawn out nature of investments
In: Economics
Most of the gambling is uninformed betting. You don’t have any information on the lottery numbers of next week or the next number on the roulette. It’s a blind bet.
Investment is an informed bet, aka speculation. You can lose, you can have the wrong information or the wrong math, but in general you plan ahead using whatever good or bad information you have. Like, buying a house assuming that the house prices will go up – it’s investment even if later you happen to lose, because you did calculations and future predictions based on data.
Obviously some people do gambling with investment assets, like buying and selling random stocks and hoping for the best but it’s not investment, it’s gambling in disguise. Also sometimes people have more information on some bets that are seemingly gambling bets so it’s investment for those people. Like, there was this scandal many decades ago when a hacker somehow figured that a certain button combination triggers a bug in the slot machine, so they turned gambling into investment. They still needed some initial investment but the cash-out was reliable.
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