is the stock market gambling?

I mentioned in an earlier post that I had a discussion with some friends over whether or not playing fantasy football is considered gambling. Of course the majority of us agreed, then I had this one goofy buddy of mine start throwing out scenarios. He basically stated the stock market is technically gambling too. As I feel it is a gamble, my initial thought was that it was not gambling because you are purchasing ownership of a company. It entitles the holder to a claim on assets as well as a fraction of the profits that company generates (investopedia). But some still say it is gambling. If that were so, then what about mutual funds and other investments? Trying to open my mind to different points of view, I listened to what he had to say and it did provoke some thought.

Granted he is a novice investor, I decided to share my friend’s response with you: You know I’ve been playing in the market now for about 1 1/2 yrs, and man if that’s not gambling I don’t know what is…lol. Granted the more established company less risk, but man you make your real money by investing in those “C” companies that are either new or maybe coming off a bad year for whatever reason. It’s less than 50/50 whether they’ll do well enough to allow you to even break on your investment. So I’m like, if I knew going in of the potential risk of losing money and trust me its a lot more than $50 (fantasy leagues, lol) …is that considered gambling? I started thinking like man I preparing for the future but I could rob a bank and say the same thing.

Then he just started getting outright silly: Or how about kids that play those games at Chuck-E -Cheese where you got the little hand and you put in a qtr to see if you can grab the stuff at the bottom. Man how often did you really grab anything??? Has to be gambling!!!! Or the majority of all games at the fair that are actually structured for you to fail and we still play time and time again…Gamblin!!!!

I had yet another friend tell me – What about poker? The whole game is based on gambling. you can’t play poker without gambling. Chips or cash but something has to be wagered.

Of course people try to find ways to justify what they are doing, and some comments were meant for comedic value only. Yet in still, it still makes you think. I went back to my original e-mail where someone stated that he didn’t look at fantasy football as gambling until he looked up the definition:

– To bet on an uncertain outcome, as of a contest.
– To play a game of chance for stakes.
– To take a risk in the hope of gaining an advantage or a benefit.

Per the definitions above, stocks would technically fall into that category. So my question to you – How do you define gambling, and where do you draw the line? Do you consider the stock market gambling? Why or why not? How about fantasy football? Poker? Other?

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s