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I think both generalizations are incorrect. The above-mentioned people who "buy value, management, product" that you're thinking of are speculators, who call themselves "investors". As for actual investors, not all of them systematically expose themselves to the value factor. Also, in my experience, they are advised by people with the right tools to achieve much better executions than the average retail speculator, and certainly don't "buy at the high of the market".
Agreed, we can have a polite conversation over this.
You keep referring to this word speculators as some sort of bad word, but whether you are a long term investors or hold a position for 2 minutes, you have speculated. Typically beginners in trading and investing afraid of two words, and they are "speculating" and "gambling", yet those who have been doing for a very long time accept that they speculate and they do accept that gambling combines math, odds, edge and psychology that at times could explain crowd behavior as a whole. Therefore, they don't get bent out of shape if someone calls them a gambler or even a speculator.
Those who buy at the right price despite of holding period are traders, because they do understand that timing is everything. For example, it takes a trader to buy "blood on the street" because he/she understand crowd psychology.
My bottom line is this: You cant buy or short any financial instrument without risk management.
If you don't have it in you to manage risk like a trader, you will pay the price.
I have no idea who are this privileged group of people you say have better timing, better tools, executions, etc. This is also another myth floating around that some have some privileged info, unless it's insider info.
Bill Gross recently had the worst loss in his portfolio since 2008, and that is a fund with billions under management.
So what tools were not available to him that are available to this group of people you referring to?
Due to his loss, was he also a "speculator" according to your definition?
Any financial tool, any leverage, any time frame traded, requires risk management and if you simply go and invest in anything without the ability to define an exit plan, you simply trade without risk management.
Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
1 800 771 6748 local 561 367 8686 email [email protected]
My point is that it's not appropriate to refer to "investors" as a derogatory term while setting "trader" as some kind of standard to aspire to, and especially not in this context where the "trader" that people are aspiring to is really simply a "speculator".
Definitely, it was not my intention. At this and age when we are going through new market highs, many will be sucked into the market because of "long-term". I only want these people to have an additional thought "what if my theories don't work out?" and this will force one to have an exit plan, for both profit and loss. My intention was only to help.
Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
1 800 771 6748 local 561 367 8686 email [email protected]
A trader is simply a person who buys and sells whatever as a business. E.g. market trader, street trader, auto trader.
Investor and speculator are both more meaning-laden words.
How about a cynic? According to Oscar Wilde, a cynic is someone who knows the price of everything but the value of nothing. I wonder how such a person would fare in the markets.
You can discover what your enemy fears most by observing the means he uses to frighten you.
The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor. --Jesse Livermore
There is nothing new on Wall Street or in stock speculation. What has happened in the past will happen again, and again, and again. This is because human nature does not change, and it is human emotion, solidly build into human nature, that always gets in the way of human intelligence. Of this I am sure. --Jesse Livermore ( a few more here if interested)
I wonder how such a person would fare in the markets.
