Trading or Investing?

nobody is trading, especially not the big guys. the only people trading in the sense of trading are brokers (not the bucket brokers).

the big guys are investors just as well, paying more attention to instrinct value than anyone would ever guess.

the big guys are owners and mathematicians paired with economy and lots of financial knowledge.

when funds/hedgefunds invest into a equity then they do not invest bcause they think that the price should go up 25% in the next 1-2 years because the brand behind it is cool or in the news right now or because TA signals a rise (TA is pretty unimportant in the true fields of investing, it is considered similar to astrology). they calculate the instrinct value compared to incoming cash beeing 25% higher than it is right now, so they buy and wait for the 25% and sell once the 25% arrived, or- whats more likely, once the 25% gain happened they calculate again with new numbers if something changed and when they see another 25% value rise, stick to the investment.

an example: company A earns 1.3 million in earnings before interest, tax, depretiation and ammortization (EBITDA)
Company Aā€™s market capitalization is 10 million
This means a EBITDA of 13% or in other words, if you want to buy the company you need 7,7 years to pay off the investment by the income the company is generating before taxes ammo.-depr.

Other companies in the same sector trade at 10 years EBITDA/INVESTMENT

so the instrinct value of cmpany A is 13 million and not 10 million.

You have a discount of 23% and a upwards potencial of 30% once you purchased company or the at least some shares of the company. when others see it trades for less the discount is more likely to close to 0% (meaning you gain 30%) than to widen (meaning you losing).

This closing can happen within a week, or a month or a year, sometimes it takes longer for the market to realise the gap and to close it.

this is for small new commers company and as well for developed market players, the same practice.

successfull investors (billionaires): warren buffet
george soros
ray dalio

successfull traders:

? who? name him please.

there is no need to ask the question of if trading or investing is better. history itself and a lot of statistics prve that if you want to make money, you must be an investor and not trader.

and btw trader is such abroad term that this question can not even be asked properly. investors as well, investors exists in all industries and shapes and forms.

the real money comes from investing, the dreams come from trading.

Check your surrounding, you dont need to go into wall street to answer the question.
In yoour surrounding the people who are wealthy are the ones who own something, a business, lad, real estates etc. those are all investors paired with some knowledge of how to run a business. any mcdonalds next to you has 3 investors, the mcdonalds company, the share holder of the mcdonalds shares and the franchise partner who invested the money into the location next to your house. have you ever seen a mcdonalds franchise partner go broke?

Same goes for realestate, a hotel is not owned by the chain thats managing it, the real estates belongs to a investor, this can be a real estate fund, a wealthy individual, the government etc. the management is owned by a chain company, which is owned by investors who hold shares. they all earn money, and compared to the little fluctuations of 5%+/- on the share price and the potencial a ā€œtraderā€ could earn on this moves in a year, their gains are way higher.

anyways, the bottomline for this question is the same: you need money to make money. with 1000 you wont get anywhere, with 10000 you wont get anywhere, with 100.000 you have some sucess rate that can be statistically significant.

you cant go from 0 to investor, nobody managed that besides warren buffet who took in loans from friends and family to start his first investment. you must first earn money with your knowledge and good old hands on work and later once you got money you can start thinking of becoming a investor or ā€œtraderā€.

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Both are good if you can do it properly. But once you have huge capital you have to go for investing. Then you canā€™t make frequent trade. As long as you have small capital itā€™s up to you. Itā€™s all about your comfort. Everyone is different from others. You have to find what works for you.

MrDE - Your posts are becoming almost as long as Martin_Kā€™s. I think both probably contain good content but sorry to say Iā€™m not reading all of either.

thank you for letting me know

Fair enough. Best wishes.

edited the post to spare our friendship.

MrDE - thatā€™s jolly decent - I donā€™t have a problem with you or your posts, but I just wonā€™t be reading anything that lengthy. Martin_Kā€™s the real culprit. Heā€™s a good sort too: probably doesnā€™t like to admit it.

its ok. im sure 1 or 2 sentenced answers to complicated questions wont get you far in trading nor in life. id wish you change your mind and see that theres is no wisdom neither in forum nor in easy answers (see martin i spelled answer with ā€œeā€) but the path to success is a path you must decide to walk by yourself. noone can (and noone has absolutely no intention/bebefits/intereat, especially not me) drag you through that path like a death corpse behind him.

Weā€™re good. As the Americans say.

I try ever so hard to make my forum answers either questions or statements that obviously invite questions. Makes people think. Sometimes when tired Iā€™ll say - donā€™t do this youā€™re stupid do what I do instead - but thatā€™s not really helping anyone.

Good evening.

hi @tommor
iā€™m sort of confused
but I THINK this is a complimentā€¦ right ?
if it isā€¦ thank you

you see, in Australiaā€¦ A GOOD SORT is a HOT CHICK
a guy generally doesnā€™t call another guy a good sort

i think you mean to say im a good guyā€¦ is that correct
if so , thanks

as to admitting it
i will admit i try to beā€¦ sure
but i donā€™t want to come across stuck up either

In the UK a good sort is an old-fashioned and maybe upper class expression for a good guy as used by another guy. He would never use the expression for a female and a female would never use it for either a male or female. Its a nice way to say you like someone without saying you like them, which we find a little too direct to be comfortable with.

Yes, I know weā€™re strung a little tight over hereā€¦

Your posts are good but could be shorter?

@tommor
hehe thatā€™s funny

but thatā€™s what i thought you meant.

mate, in Australia, weā€™d see a hot chick and say "sheā€™s a good sort"
itā€™s sort of like you guys saying "that bird is fit"
now imagine saying to me ā€œMartin is fitā€ LMFAO thatā€™s how it came across.

either way mate
i thank you
and i accept the comment about the long posts.

i think you can probably look forward to shorter posts in the future and (Respectfully ) my absence on this site

i am really seriously considering leaving this site because i have to tread every so carefully to not offend people (not you. buy the way, for the record)
itā€™s like. you say the most innocent thing and you get a flag

nowā€¦ depending on the answer that i get from the mods, will determine if i care to stay any longer.
if i leave it wonā€™t be out of anger,
it will just be because i donā€™t want to play games with little princesses and little snowflakes that donā€™t understand that we are here to learn to make money.
and i donā€™t want to keep having to put in more effort because people canā€™t think for themselves

againā€¦ Not you

so maybe you will get shorter posts hehe
weā€™ll see
either way mate, thank you for the compliment
be cool

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My short reply is -
Donā€™t leave Martin.

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and my ATTEMPT at a short reply is

  • thank you, i appreciate it sincerley

  • @anon46773462 had a chat to me , iā€™ll consider what he said.

nowā€¦ if i go on further i know itā€™ll be a wall of text. so heheā€¦ iā€™ll stop here.

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I agree with all of you. And my opinion is all of us want to feel ourselves comfortable.
If someone likes writing a long post, write a long one.
If someone wants to write a short post, write a short one. Personally for me it does not matter. I will read both short and long posts.

On the one hand, the thread encourages us to philosophize. But on the other hand would like to hear more specifics from you. Share experience, who has what results. Who prefer trading? Who prefer investing? You can even show the results in a percentage. It will be more clearly.
For example: trade vs. investment: 50:50.
Maybe then we will understand our reasoning.

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I also trade and invest. If you take a specific period, such as a year. Trade brought me 15%. And the investment 60%. I consider only profitable periods, Losses do not include. Itā€™s useless.
Of course I can trade badly. But you asked for specifics.

In Forex besides currency trading there is an opportunity to invest. The investor and trader both of can invest in here to ensure another source to earn profit. In my trading career, besides manual trading sometimes I invest on PAAM services from where I can gain more profit. actually Forex market is open for all opportunities.

Hey, Iā€™m new here. Hello to everyone.
Iā€™ll try to write a medium post, comfortable for reading, LOL.
My investing experience includes only real estate investments and business shares investments. Also, I used to trade more than 2 years on FX. The biggest issue related to trading is unstable an nervous process and difficulties with diversification. What about investing, I earned much more with shares investing and now, this is a passive earnings that help me improve my own business. If I was a Forex trader, I wouldnā€™t be able to get out of debts. In conclusion, let professionals to trade and earn money, and investors to invest.

Investing in shares, even if you have a long time horizon, is only lower risk than trading because the shareholder cannot lose more than the price paid per share. The problem is that your pound has little leverage. You can buy a blue chip share at 500p and Iā€™m sure youā€™d be happy with an annual dividend of 25p and to see price double to 1000p in 5 years.

So discounting inflation and even assuming pessimistically your dividend was never increased pro rata with the rising share price, your pound has netted you a gain of 625p, or 125%.

Whereas that same pound if leveraged and deployed through derivatives on a short-term basis could net 100% profit in months, maybe weeks, every single year. And some of these instruments are even tax-exempt. And some traders can even short a falling market: share prices can go down as well as up so in a bear market you could end up with no income and no saleable assets.