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Investing or Gambling?

I subscribe to a very large number of investment advisory newsletters which are produced by groups of people throughout the world whose job it is to pick “winners” and then divulge to subscribers what the winners are – for a fee of course.

The work they do is immaculate and some of their results are spectacular – despite this they will regularly tell you that NO ONE gets it right 100% of the time.

Most of us like the idea of buying something for $2 and seeing its value rise to $10 or even further, to $40! Most of us are too scared of losing money to bet on the horses or the dogs, to buy Gold Lotto, or even to invest in the share market.

The share market is not a casino and I cringe when I see professional investment advisors use the term “punt”. My greatest objection to this part of the advisory industry is the assumption made by the proponents of "buy cheap and watch it grow" (exponentially when the hidden news reaches the newspapers) is their assumption that everyone will happily dance a jig when their penny dreadful stocks turn into blue chips.

I bought my BHP shares in the 80’s. I still have them but when the price dropped from $25 to $14 in 6 months I had great difficulty answering the question – “What did I do that for?”