To put it in the simplest terms, it comes down to when the moment of selling occurs and when the moment of buying occurs.
There is often a discussion of speculation versus investing, and I think it's worthy to attempt to define one versus the other in a manner that the professional investor will recognize. To put it in the simplest terms, it comes down to when the moment of selling occurs and when the moment of buying occurs.
The speculators who do well are going to buy from somebody who has sold, and they will then sell to somebody else at a higher price. But these are transactions. They're transactions that might be driven by a variety of factors. There are many reasons why and different ways people can make money in a given moment in time. If you add up the losses and the gains, they should add up to zero in the end. Ultimately, everyone sells their assets, leaving no remaining ownership.
The investor, on the other hand, is going to participate in the economic future of a business that they own. This participation may lead to loss, or it may lead to gain, but the connecting line is something occurring in the real economy over a long period. This explains why investors with the longest track records have successfully adjusted their investing to fit new trends, a historically difficult task for speculators.
Dismissing all speculation is wrong-headed; however, its value is only financial, stemming from potential strategic or operational benefits to the speculator, not purely financial gains. The head of my organization trained me, engaging me in intellectual discussions about current market trends. For instance, there could be a 10-year period in which a certain thing works and then it stops working. Often, this could lead to a change in leadership of the organization in an attempt to find somebody who can invest in this new speculative trend. That's the thing: trends do change, the rules of the speculative game change and you must adapt accordingly.