my daily trading

My daily trading is my media for sharing my thougth, expression, and idea of stock market. I hope you can give your own opinion too about every topics that i posted

Wednesday, April 11, 2007

When We Can Do Speculation?

Most of all do not understant the basic of speculation...they think gambling is the same as it is not the same thing...many times I tried to explain it...but no one...still cannot understood....

Today, I will try explaining it more simple...

To speculate you must need all of this condition below, before you can decide to speculate on it (whatever your media : it can be property, cassino games, business, sport or securities).

First of all, you need the condition that has the probability in your favour. You must has an edge to describe the condition when the probability moves on your side. If you play coin toss, there will not have speculation criteria except gambling, because your probability cannot exceed 50%.
And on cassino house it is very difficult to find the games that has probability in your favour.

Second, it must has a projection profit larger than the risk. I will call something as speculation if it could reward me $3 againts the risk of $1. But It always a gambling if you migth have a reward $1 million and also you migth loose it $1 million.

This is the basic of speculation. Very simple but many of us ignore why we always see someone who never wants to play any card games in his life (because he said it is a gambling and i'm a businessman) but do gambling in his business many times before he bankrupt.


At 10:52 PM, Blogger alex said...

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At 4:43 PM, Blogger alex said...

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