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Gambling vs. Investing

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  • Description

    Dr. Keith Ablow discusses whether people who are addicted to investing in stocks.

  • Duration 4:09
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This transcript is automatically generated

-- got a question for.

What is the fine line between gambling and investing.

Are you gambling when you buy stocks the man who knows the answer is doctor -- How blue -- fortunately he is what does right now about the -- welcome thanks for having me this well crisis.

Gambling is different from investing gambling you roll the dice and you could lose it all 100% of your bat and -- -- law.

Investing you roll the dice and you can lose a large proportion of -- -- but not everything.

And you'll -- you're investing on the basis of knowledge I say there's a difference.

There's definitely different now there are some -- differences people who really know horse racing who would say look I'm doing it based on expertise and may -- there are few who are.

But they're rare.

That the thing about investing.

And financial markets is that yes it's based on knowledge the question is how much knowledge you really have.

And how much can you penetrate sort of the that inside -- Of these companies and of the government and the rest of it such that you can really know that this is better than pulling the arm on a slot machines.

Do you think people are addicted.

To investing in stocks that they get a thrill out of it do you think that's well is I do think that they get a thrill out of it and I think in the same way that some folks think they're lucky.

Because they -- -- gambling I think that they're investors not the biggest ones but many many who are smaller investors who believe that.

This shows either that they're lucky or that they're very very Smart.

So it's addictive because you start to think boy I'm like magic.

Or just get a sixth sense for this stuff.

That's where you can lose a lot of money because anyone will tell you the most successful investor is doing it in a very disciplined fashion.

No emotion about it all they have certain targets they sell they buy -- this targets and that's how they do it it has nothing to do with how Smart they think they are.

I tell you how some people are indeed flat out gambling on the stock market doctor there of people watching this show right now who are not listening to me what you write that watching -- tape.

They're watching the stock price and it will buy at say 9:50.

Eastern time.

Wait for the stock hope this all goes up ten cents and that will sell at 955.

That's cold day trading I think that's fuel gambling.

And if they lose money they go back in again because they're trying to make up their losses pure gambling.

Well I think that's pure gambling absolutely so we agree there and I also worry.

That because we are at some distance from reality now in our culture.

That these markets may not even reflect.

What reality is that literally this that the stock market could float free of fat.

Like -- helium balloon carrying with that all the people would say what happened.

-- what happened is remember the Internet bubble but remember this bubble that bubble we could be another bubble where we're printing money it's sustaining a fiction.

And we have to pay with pain later so I worry that folks who think -- investing could be part of a kind of mass.

Lack of reality.

I don't worry about.

That's a fascinating thing you come up with that that we are divorced increasingly.

Divorced from reality.

And you think that's because of social media.

I think it's because of social media reality TV.

Which is in reality we all know.

Technology of other kinds listen when people send instant messages to fifteen people at a time and you receive one and you feel valued because of focus on three charity.

They -- invest anything in that.

Hence you have a false connection to that person.

That's fictional same in the stock market this whole bubble can float away right Dennis Rodman went over to and and cavorting with a dictator.

Suddenly they're people who fit truly believe willing must be a nice -- yeah you're right that's the power of entertainment and it can enter the markets -- -- write a book about us.

I would love to read a book about that -- what their proposal but a book like -- -- -- and he probably congressional committee isn't my idea let's just co author.

Hi tomorrow on the other hand will how -- we will REI all right -- decades -- -- thank you very much to our democratic.

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