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At 12:02 AM -0700 7/7/99, Alexander Levitin wrote:
>What is the difference between gambling and speculation? It is the
>interesting question by itself.
>
>There is no question that there are skillful gamblers and lucky speculators.
>
>I think that the difference is in the underlying reality. Games design to
>be random (regardless of implementations that could have biases).
>Speculator is trying to predict (and act on his/her prediction) an social
>(economic) reality that has its nonrandom processes.
Gambling has a known negative expectation of profit so if you keep
playing it long enough, you will lose money.
A good trading system, either "mechanical" or discretionary, has a
positive expectation so that if you keep playing it long enough, you
will make money.
That is quite a difference.
Bob Fulks
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