share markets and gambling

[Guest guest]

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anonymous

share markets and gambling

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My lengthly comments....

 

Naveen Krishna Prabhu, who was, or is, ISKCON's Minister of Finance, once

told me in Alachua that the subject of the stock market once came up to

Srila Prabhupada. Either Naveen asked himself, or someone else asked and

Naveen was there, I don't remember which. Naveen told me that Srila

Prabhupada answered that working with the stock market could be good, but

you really need to know what you are doing.

 

This makes a lot of sense to me, because in my personal experience, I see

that investing/trading can definitely be a business, but you absolutely need

to know what you are doing. Just like in any other business.

 

I see the difference between business and gambling like this:

 

The businessman has clear knowledge and experience of his particular

business and has a very methodical business plan, part of which deals

successfully with managing both the profit and the risk of that particular

business. He must take chances and risks in order to grow, but they are

planned, calculated risks.

 

The speculator or gambler depends primarily on hope or chance and has no

clear business plan.

 

Any business whatsoever -- including running a restaurant, a shoe store, a

dot com company, or one's personal investing/trading -- can easily be turned

into a gamble by losing the knowledge aspect and the business plan and

depending instead on hope or chance. Without a clear study of competitors in

the area, or what foods the local clientele has interest in, or where is the

best location, the restauranteur is gambling that his venture will be

successful and will no doubt fail as a consequence.

He will lose to the competitor across the street who has studied the facts

and applied the knowledge necessary within a well thought out business plan.

 

So any business can be treated in such a way that it becomes a gamble. The

business world is full of stories of failure due to poor or non-existent

business plans, and the markets are littered with people who have little or

no knowledge of what they are doing, and have no clue of how to approach the

subject of investing as a business (which takes much time and effort to do).

 

Your words describing your understanding of what the markets are -- and your

assumption of what they must be -- shows me that you would approach the

markets not as a business but as a gamble, and that you would unfortunately

pretty much "lose your kirta." Those that have learned to treat the markets

as a business would take your money from you, just as in the restaurant

example above.

 

I assure you that it is possible to approach the markets with a clear

business plan and business rules of money management and risk management,

plus techniques of scientific technical analysis -- turning it into a

manageable and profitable business. However, whenever devotees approach me

to find out how they can do what I am doing, I discourage them 99% of the

time for the following reasons: (1) The vast majority of devotees have

neither the capital required or the time needed or the interest or the

business-minded discipline critical for success in this and (2) The vast

majority of devotees have a knee-jerk reaction when they hear the word

stocks or investing, etc, and discount it immediately as gambling. And for

them, since they look at it that way, it is! As we've discussed above, it

depends on how you approach it.

 

(Another philosophical point of difference between business and gambling:

Many people define business as an activity in which some kind product needs

to be produced to somehow benefit society, either directly or indirectly.

This activity does not happen in gambling.

 

For example, the stock and futures markets are, in fact, direct means of

investing in the growth of major corporate businesses and therefore

contribute directly in the ability of those businesses to grow and produce

products. Gambling at a casino or at a race track does not produce any

products, directly or indirectly, in that sense).

 

Regarding types of investment, government bonds are a passive, very low risk

investment that gives a very low return commensurate to that risk. This may

be perfectly acceptable for one type of individual. Another individual who

desires a more proactive involvement in investing should educate himself in

the business of investing. If he can take that time, effort and expense to

do so, his returns will be proportionately commensurate to his efforts. Like

they are in with any other business.

 

Hope you are well. Hare Krishna.

 

ys,