<story><title>Are You Trading or Gambling?</title><url>https://investinglessons.substack.com/p/are-you-trading-or-gambling</url></story><parent_chain><item><author>ab111111111</author><text>&amp;quot;Gambling occurs when you have a poor understanding of risk, resulting in either (1) negative expected value bets, or (2) poor bet sizing that leads to ruin.&amp;quot; Not so. Top poker players are still gambling, but have an excellent understanding of the risks. Their skill doesn&amp;#x27;t turn them into investors. Gambling is taking a high risk bet. Whether the expected pay off is high enough to justify the risk and whether you can afford to lose the bet is a separate issue.</text></item></parent_chain><comment><author>Raidion</author><text>I (and I think a lot of poker players) would disagree.&lt;p&gt;Everything in life involves some sort of risk, but doesn&amp;#x27;t mean it&amp;#x27;s gambling. Gambling is defined exactly by those two properties. You could die driving to the store, but the odds are tiny and the benefits are huge. Driving to the store isn&amp;#x27;t gambling. Are casinos gambling when they let you play blackjack? No, the bets are +EV, even those they are only a few % different than the player odds.&lt;p&gt;You say poker players are gambling and then say gambling is taking a high risk bet. Good poker players make positive expected value bets, and have correct bet sizing (via Kelly Criterion) that means they will be able to survive variance and win.</text></comment>
<story><title>Are You Trading or Gambling?</title><url>https://investinglessons.substack.com/p/are-you-trading-or-gambling</url></story><parent_chain><item><author>ab111111111</author><text>&amp;quot;Gambling occurs when you have a poor understanding of risk, resulting in either (1) negative expected value bets, or (2) poor bet sizing that leads to ruin.&amp;quot; Not so. Top poker players are still gambling, but have an excellent understanding of the risks. Their skill doesn&amp;#x27;t turn them into investors. Gambling is taking a high risk bet. Whether the expected pay off is high enough to justify the risk and whether you can afford to lose the bet is a separate issue.</text></item></parent_chain><comment><author>PragmaticPulp</author><text>Anecdotally, a lot of the new stock and crypto investors on the internet this year hold no illusions that they’re investing. The pop-culture mindset is that the stock market is just gambling, so they might as well bet big with long shot companies and options.&lt;p&gt;The common sentiments are “I’m only investing what I can afford to lose” and “but what if this is the next GameStop&amp;#x2F;Bitcoin?” They’re entering with a mindset that betting it all is fine because they’ve mentally written off the money.&lt;p&gt;I’ve been using this as an opportunity to introduce friends and family to more passive, long-term investment strategies but the skepticism is strong.</text></comment>