MANY people believe speculating and gambling are the same thing. Nothing could be more incorrect. The first major difference is that speculation always brings some direct economic benefit to society as a whole whereas gambling never does.
Another major difference is that in gambling there must be a loss for every gain. In speculation both parties can win, or both parties can lose or one can win and the other lose. In the free-market system, speculation is one of the main tools that balance supply with demand.
Speculation is one of the most noble ways in which a person of humble beginning can make for himself a brilliant future.
Investing is totally different. Investing is the effort to secure payment for the capital involved without giving any service or labour.
Speculating is an effort to increase capital without giving any labour or service. Speculation is the tendency to act on instinctive desire for ownership and is directed by speculation concerning the future production, acquisition or distribution of wealth.
Charting rises and falls THIS writer predicted the 1987 crash and publicised it 10 days before Black Monday. Since then people have been asking how the prediction was made. The method used was indicators.In 1987 this writer used eight major indicators and 12 lesser indicators. These were some indicators we used in 1987: Rises or falls in the US three-month Treasury Bill yield have proven a correct indicator almost 80 per cent of the time since the 1920s. A 17 per cent increase in the T Bill yield indicates there will be a major fall in US stock markets. This is becausewhen a rise in safe US short-term paper yields occurs, stock speculators will move out of the stock market to get the higher yield. This indicator told me in August, 1987, that a fall in the stock market could soon be expected.