The Stealthy Sisters of Spin and Speculation (Part 4)

I left off with a mess, basically. If necessary, please go back and read the previous installments to refresh your memory.

With regard to group discussion about trading/investing, it might be beneficial to identify everyone’s background in advance. It’s easy for anybody to say things that sound good whether they be full-time traders or part-time speculators. What might be said by the latter can be toxic to the former, though. Speculative content is also not generally actionable for people looking to get involved with responsible trading/investing. Laypeople should have the opportunity to align themselves with where they want to be.

The challenge then becomes educating people on what makes for speculative vs. responsible trading/investing content.

I trade full-time for a living and I lean strongly to the “responsible trading/investing” side. If I screw up then I’m out of business and I go back to a conventional, corporate job. While I did say speculation may be okay in small doses, my personal bias is to do it outside the markets altogether [as an aside, because many laypeople think all trading/investing is gambling I often get a laugh when asked if I ever play casino games because I respond “I don’t gamble”].

Besides myself, financial advisers and wealth management professionals also shy away from speculation. Many of their clients are closer to retirement and speculation flies in the face of capital preservation.

Financial advisers avoid speculation but make constant use of spin. This has been addressed in previous blog posts.

The end result of spin and speculation can be similar and that’s my reason for describing them as sisters. They are stealthy because people don’t recognize them and see the complete landscape (i.e. the “forest for the trees” analogy). Laypeople think the spin and speculation are responsible trading/investing, which they are not. Both spin and speculation lead people to trade/invest in managers/strategies they believe will generate profits. More often than not, though, I believe this works out to their detriment.

An insightful book has been written on speculation. I will discuss that in the next post.