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Understand the difference between investing and gambling from "summary" of The Intelligent Investor, Rev. Ed by Benjamin Graham
Investing and gambling are often viewed as similar activities, but they are fundamentally different in nature. Investing involves analyzing the fundamentals of a business, such as its earnings potential and competitive position, before committing capital. This approach is based on the belief that over the long term, the market will recognize the true value of a company and its stock price will reflect this value. By contrast, gambling is characterized by speculation and chance, with no regard for the underlying value of an asset. In the world of investing, the focus is on minimizing risk and preserving capital. This means diversifying investments across different asset classes and industries to reduce the impact of any one company or sector performing poorly. By taking a disciplined and patient approach, investors can achieve consistent returns over time. On the other hand, gamblers are often motivated by the thrill of the chase and the potential for quick gains. They may take excessive risks in the hope of hitting it big, without conside...
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