Comments on: The Ethical Implications of Gambling as a Time Traveler

By: Bill

Bill — Mon, 11 May 2009 21:19:14 +0000

Yes, a stock trader is almost a naif and an innocent in a world of credit default swaps and collateralized debt obligations. Ironically, the sophisticated options arrangements that brought down hedge funds and banks were originally devised to mitigate risk.

Options allowed the commodities markets to hedge risk so that, for example, citrus growers would not be financially ruined by an unpredictable weather year. But options can be used conservatively, or (with the outrageous leverage some banks were using) recklessly. Another problem is when the size of the market is distorted as with a stock with a very small float (% of outstanding shares), or as we saw last summer, when big institional investors and pension funds started to pile into the oil market, without ever having any intention of taking delivery on their contracts.

By: jay s

jay s — Mon, 11 May 2009 06:43:03 +0000

Bill

The motivations of the stock trader aside, he is generally buying and selling things with at least some grounding in a legal reality. I say generally because there are those who purchase options, which are even further removed from an actual investment. That aside, the stock picker certainly can act like a “speculator”, but not necessarily like a gambler. But giving money in exchange for something you think will be worth more in the future is not necessarily gambling. But if dealing with risk is gambling, then every profession which can be affected by randomness is one. See the California citrus farmers in the late freeze…

By: Bret

Bret — Sun, 10 May 2009 22:31:33 +0000

Pres. Hinckley sited "get something for nothing" in his 2005 talk. His official definition is "Gambling is simply a process that takes money and does not offer a fair return in goods or services." Which certainly makes more sense but I still don't fully understand. What does that really mean? Anyway, like I said, thank goodness I play boardgames and not these chance games:)

By: Bill

Bill — Sat, 09 May 2009 23:58:11 +0000

The stock investor is buying something real, but the stock trader, using leverage and holding positions for minutes at a time, while theoretically dealing with pieces of real assets, is really functioning more like a speculator or gambler. But the investor would have no way to sell into a liquid market without the activities of the traders.

By: AJ

AJ — Sat, 09 May 2009 22:21:42 +0000

I think the “get something for nothing” phrase is overused. My inheritance falls pretty much under that category and I don’t have a problem accepting it. Gifts are too. I always thought the main problem with gambling is that it’s addictive and can wind up ruining a person financially.

By: Bret

Bret — Sat, 09 May 2009 22:00:46 +0000

Jay,

That’s the first real, coherent argument I’ve heard for stocks as not being gambling. Thank you.

However, I still do have NO idea what “getting something for nothing” really means. Thank goodness I’m a boardgame geek and not into gambler:)

“So what’s it gonna be, McFly?! Are you in, or out?!”

By: Last Lemming

Last Lemming — Sat, 09 May 2009 18:41:35 +0000

Seems to be the sort of thing that should result in felony prosecution.

No sweat. You just time travel back to a point in the future when your sentence is over.

By: Stephen M (Ethesis)

Stephen M (Ethesis) — Sat, 09 May 2009 17:08:19 +0000

Would time travel stock picking count as an inside trading violation? Seems to be the sort of thing that should result in felony prosecution.

By: Phouchg

Phouchg — Sat, 09 May 2009 16:36:38 +0000

#2 – why do you assume that the other players have money they can’t afford to lose? Perhaps that is their money they have set aside for playing. I do agree that many times stupid people bet money they can’t afford to lose. Last year I saw one guy blow his entire paycheck at a blackjack table. I will never forget the fear in his eyes when he lost his last chips.

On the other hand, blackjack and poker are games of skill (with an element of chance). Skillful play, especially in blackjack, can result in an advantage for the player. I have learned a card-counting system that allows me, under certain conditions, to have about a 2% advantage over the house. Not enough to live on, but enough to occasionally make a nice little profit.

Now, slot machines, roulette, the lottery – those you might as well just flush your money down the toilet.

By: AJ

AJ — Sat, 09 May 2009 15:41:25 +0000

I am just finishing up Season Two and am glad to know that at least two of the original cast members are still on the show! So far, it just seems that the writers plant to kill everyone off and it’s getting on my nerves.

I know this isn’t really the topic but I just had to throw that in there.