Intelligent Speculator is NOT an oxymoron

By: ispeculatornew
Date posted: 01.28.2011 (5:00 am) | Write a Comment  (3 Comments)

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During the most recent holidays, we published what turned out to be a very popular series regarding things I would do if I were at the head of different technology companies among those that I follow on this blog. By far the most controversial among those posts was the one about what I would do if I were Apple (AAPL) CEO Steve Jobs for a year. It’s not a bit surprise, Apple fans are very passionate about the company, its brands and everything else about Apple. I would know, I am part of those fans. That being said, I still think it turned out to be a very interesting post and the comments that followed will certainly develop into many future posts over time.

One of the comments that I felt the need to answer to is that IntelligentSpeculator, the name of this blog, is an oxymoron. I’m not sure if many others believe the same thing but I would argue that idea vehemently. Why? There are many different definitions of “speculator”. In general, in investing terms, I would personally say that you are either a hedger or a speculator. That is also how many future exchanges classify investors. Are you buying assets in order to hedge something else or to gain new exposures? For most of us, it is the former.

Others would say that a speculator is someone that takes risk in order to make profits. No matter how much risk is involved, most investors are speculating.

That being said, my main argument would be that among all of those that take risks, traders can have many different ways of finding their investment ideas.. Some simply hear from their neighbor, a friend, a family member or on tv about a company and will blindly buy it looking for the next Berkshire Hathaway. Others will do in depth research looking for the best opportunities. I would like to think that this blog is more about the latter and thus I would personally be thrilled to be called an “intelligent speculator”.

What about you? Do you think it’s impossible be smart or intelligent when doing speculation? Or that somehow all speculators are stupid? Or do you simply have a different definition of speculators? I personally don’t see anything wrong about taking risks as long as the expected profit is good enough to compensate for that risk. Do you agree?

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3 Comments

  1. Comment by Balance Junkie — January 28, 2011 @ 9:02 am

    I certainly agree that “intelligent speculator” is not an oxymoron. The population of speculators is just like any other – some are smarter than others. One thing I would note, however, is that the smartest folks don’t always make the best speculators. It takes a certain type of street smarts to speculate successfully. Academics don’t usually make great speculators.

    I’m afraid I would put myself into the latter camp. I have thought my way into more losses than I care to admit. At the same time, some of my best trades were those where I followed gut instincts and basic trading axioms. Who knows? One of these days I might strike the right balance. 🙂

  2. Comment by Doctor Stock — January 30, 2011 @ 7:31 pm

    Yah, I certainly wouldn’t let that get to you. After all, if we are honest, all investing is speculation of sorts… And some do it more intelligently than others. Keep up the good work.

  3. Comment by IS — January 31, 2011 @ 5:34 am

    @Balance Junkie & Doctor Stock – Thanks for the comments:) I could not agree more!

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