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On speculation:

From Gone With the Wind, here’s Rhett Butler on the practice:

“I told you once before that there were two times for making big money, one in the upbuilding of a country and the other in its destruction. Remember my words. Perhaps they may be of use to you some day.”

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“I’m surprised at you, Scarlett, for sprouting a conscience this late in life. Opportunists like you shouldn’t have them.”

“What is an oppor — what did you call it?”

“A person who takes advantage of opportunities.”

“Is that wrong?”

“It has always been held in disrepute — especially by those who had the same opportunities and didn’t take them.”

On sovereignty (Wikipedia):

“Self-ownership (or sovereignty of the individual or individual sovereignty) is the moral or natural right (aka Freedom) of a person to be the exclusive controller of his or her own body and life. It is the concept of property in one’s own person. According to G. Cohen, the concept of self-ownership “says that each person enjoys, over herself and her powers, full and exclusive rights of control and use, and therefore owes no service or product to anyone else that she has not contracted to supply.”

A note on semantics:

Most buyers of securities think of themselves as investors, meaning they only enter into trades after studied consideration, and intend to hold their positions for the long-term. Speculators are those irresponsible participants who by trying to make a quick buck mostly lose money and create bubbles and panics. They are a completely reprehensible breed, so when they do make money, it is ill-deserved and at the expense of others. So the story goes.

In truth, we are almost all speculating - buying something in hopes that it will appreciate so that we can sell it to others. It makes no difference whether a security is held for five minutes or five years - we are matching our wits against the consensus view, expressed as the market price. You might say that investing is buying non-distressed securities with no intent to ever sell. Think of Warren Buffett’s purchase of Coke in 1988, after it had been increasing its dividend for 25 consecutive years. Two decades later, Berkshire has profited handsomely from both capital gains and dividends, and has even added to its position. In contrast, as 2007’s ‘long-term’ buyers of stocks panic out of their ‘investments’ in 2008, we see them for what they really are, bad speculators.

This particular speculator is no day trader, but neither purely a ‘fundamental’ buyer either, for as the Elliott Wave practitioners teach, markets move on their own as participants herd through the world’s bourses. The true fundamentals are not what Wall Street’s analysts think.

Speculation of course, like most all honest endeavors within a market, benefits us all. For the speculator assumes risks that others don’t care to bear, allowing them to sleep at night and focuss on their own specialties. Good speculators steady the markets, for who else is buying in a panic or shorting in a mania?

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