this post was submitted on 17 Jun 2024
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No Stupid Questions

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Is there a hard threshold? Do high risk investments such as penny stocks qualify as gambling? Do low risk investments? Annuities? Bonds? CDs?

This comment got me wondering.

Is it more to do with the venue? Stock markets and real estate vs casinos and the lottery?

Were the MIT Blackjack Team gambling or investing?

Or Jerry and Marge Selbee?

Is this just another semantic hotdogs are sandwiches discussion or is there an agreed threshold?

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[–] olafurp@lemmy.world 9 points 5 months ago

Well, investing is technically always a gamble including buying assets like a house or gold. A better question would be "When does gambling become investing" and in my opinion that's when the expected return is positive.

Expected return for most crypto is negative, some are positive but they're always a gamble.

MIT team took an approach that has guaranteed success if played enough times by using math. It's not gambling, just playing a game.

Stock markets are always a gamble and investment, but buying index fund stock is less of a gamble than selecting individual stock because it's less risk.

Another question to ask is "when does a gamble stop being a gamble?" and that's broadly when the potential downside is very unlikely. Think buying treasury bonds, housing after housing crash, stocks after stock crash etc.

People also have very different views on "What is very unlikely to go down" so depending on who you ask stock, crypto and real estate can all be both gamble and not depending on which person is looking at it.