Stock Market = Gambling?

Submitted by tom on Wed, 10/29/2008 - 12:50

Is "Playing the Stock Market" gambling?

First, let's look at some of the definitions of the word gamble.

–verb (used without object)

to play at any game of chance for money or other stakes.
to stake or risk money, or anything of value, on the outcome of something involving chance: to gamble on a toss of the dice.

–verb (used with object)

to lose or squander by betting (usually fol. by away): He gambled all his hard-earned money away in one night.
to wager or risk (money or something else of value): to gamble one's freedom.

–noun

a venture in a game of chance for stakes, esp. for high stakes.

So, if we take these definitions of the word gamble, how can we relate these to the stock market.

Definition No. 1

Most people who invest will call it "Playing the market." Is this just a phrase, or is this really a game? We all know that a game implies winners and losers, in the stock market, there are both. A game has rules, officials who enforce these rules, and penalties for breaking the rules, the market has all of these. A definition of the word game tells us it is "anything resembling a game, as in requiring skill, endurance, or adherence to rules: the game of diplomacy."

Definition No. 2

Does the market "stake or risk money, or anything of value" and is the outcome of that stake left up to "chance?" The stock market invests billions of dollars every day and every dollar is at risk. There are ways to improve your chances, study hard, watch for trends, pay attention to what's going on with the company your stock(

is/are tied to, and, I'm sure, many others. You can do all of these things in games as well. We've all seen a baseball game where the manager will bring a left-handed pitcher to face a left-handed batter, or a basketball game where the coach substitutes a good defender for a good scorer every opportune time he/she has, or a poker player with a stone cold face and balls of steel, these are just ways to improve their chances of winning the "pot."

Definition No. 3

We're seeing hard-core evidence of this every other day on just about every exchange in the world.

Definition No. 4

"to wager or risk" A big-shot investor reads about Apple's new iPhone 4G (just making this up) and thinks this will be the next "big thing" so he dumps all of his Nokia stock and loads up on Apple and AT&T stocks. Three months later, Apple's 4G iPhone is a flop because there was a major design flaw and hundreds of thousands of iPhones had to be recalled. In the meantime, Nokia posts their biggest quarterly profit ever, due mostly to the failure of Apple's iPhone. Consequently, this investor's wager turned into a risk that has cost him dearly.
There's a big-shot gambler sitting at a Texas hold'em table in a big Vegas casino. He's been watching every body very closely the entire game, and he just caught one of the remaining players bluffing with only 1 card left to deal. He has a full house, so he goes all in, and to his surprise, the other player follows suit and does the same. The next card falls, and his heart skips a beat as he watches his opponent lay down a straight flush.
Both sound like gambling to me, buying into something your not sure of. (see a list of poker hands here)

Definition No. 5

"A venture for high stakes," that part of this definition reminds me a lot of these subprime mortgages the banks were issuing left and right. Was it not a huge, risky venture, for these mega-banks to issue $500,000 loans to people who only made $75,000 per year?

I believe buying and selling stocks is gambling. Last I checked, gambling is illegal in most parts of the U.S. This includes New York state, except the lottery, elderly BINGO, and Native American casinos set up on their native land. Last I checked, Wall-Street wasn't ran by a Native American and it's not on a Native American plot of land. Same with NASDAQ, which is in Chicago, Illinois. In Illinois, gambling is legal in casinos on Native American land and on river boats. Again, NASDAQ is definitely not on a boat and downtown Chicago isn't owned by the Native Americans.

Where am I going with this? I don't know. I'm just venting. The stock market has made several of my friends well-off, it has provided for many retirements and college educations. I don't think it's inherently evil, I just think a lot of the people who have a lot of say in how it works could use a better code of ethics and stronger moral values. It seems like a lust for money, power, and things have replaced "love thy neighbor" and "support your community" attitudes.

According to Dictionary.com
Legal info came from links provided at this site

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