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Investment grade silver age2425

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COLLECTOR 13.26K	13.26K shrewbeer private msg quote post Address this user	plus 1 plus 1 plus 1 0
	Quote: Originally Posted by DocBrown In other words...no one seriously considers spending your paycheck on lottery tickets an "investment", even if you might win the big one. Yeah we're pretty mich all saying the same thing but in a different language. That puts it nice and simple
	8 years ago	Post 51 • IP flag post

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Quote:

Originally Posted by shrewbeer
Lmfaoooo its just semantics.

You can have a discussion...really...without the added "lmfaoooo" (which I guess is "off off off off"...?) It doesn't add to the discussion.

But no, it's not "just semantics."

Playing the lottery isn't "investing." It's gambling. There's a difference, and it's an important one.

Quote:

Originally Posted by sb
If someone purchases something with the intent to immediately sell, that is not an investment.

True, but that's not what's being discussed. What's being discussed is the ability to sell immediately for a profit, by someone who is not a merchant of that item (which isn't investing, but plain ol' business.)

That is, arbitrage.

Quote:

Originally Posted by sb
However, it matters not the purchase price nor value of the item nor the risk if someone purchases something with the intent to hold it while it appreciates in value.

The difference in value of what one paid vs what it is worth is not part of the investment.

If I pay $10 for a TEC27, and we get into nuclear war and the economy collapses, or if I drop it in a puddle on my way out the door and its run over by a mack truck and shat upon by a passing seagull... There is risk in everything.

Hyperbole isn't a valid argument.

Quote:

Originally Posted by sb
But, the point is moot. Risk has nothing to do with investing. As @jrs pointed out, the definition is simple; "the outlay of money usually for income or profit"

Wrong.

Investment: "An investment is an asset or item that is purchased with the hope that it will generate income or will appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will be sold at a higher price for a profit."

http://www.investopedia.com/terms/i/investment.asp#ixzz4clkuWl00

(emphasis added)

"With the hope" and "with the idea" = "risk."

Sorry, but your understanding of what an "investment" is is contrary to the definition of the word.

8 years ago

Collector 271	271 I_AM_IRON_MAN private msg quote post Address this user	plus 1 plus 1 plus 1 0
	Quote: Originally Posted by DocBrown In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will be sold at a higher price for a profit." I don't think I need to whip out the definition of future, but future can be a short time after the fact, no?
	8 years ago	Post 53 • IP flag post

Joined The Club 3.61K	3.61K Steverogers11 private msg quote post Address this user	plus 1 plus 1 plus 1 2
	I love it when doc and beer are talking on the same subject. It's better than anything on tv right now
	8 years ago	Post 54 • IP flag post

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Quote:

Originally Posted by jrs
Not sure why FMV matters in determining whether something is an investment.

Because "getting lucky" isn't investing. Buying an item for substantially below what the market says it's worth isn't investing. It's "getting lucky."

If you buy an item, any item, for substantially below FMV (say, arbitrarily, 50% or more)...which is its fair MARKET value, right now...and you keep it, of course you can call it an "investment"...

...but you didn't INVEST in that item...you got lucky.

The proper meaning of the word "investing" isn't "stumbling upon something by luck and being able to purchase it for much less than FMV." It means "paying the going rate for something, in the hopes that you'll make more when you sell it in the future."

Quote:

Originally Posted by jrs
I view an investment as the outlay of capital with the hope and intention of making a profit, which is consistent with the definition:

Correct..."with the hope and intention" = risk.

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Originally Posted by jrs
clickable text

"Definition of investment
: the outlay of money usually for income or profit"

The definition includes the implied element of risk in the words "usually for..."

Quote:

Originally Posted by jrs

If I flip the item in a day and make a profit, it's a great investment.

That's not an investment. What you're doing is called "arbitrage." The value of the book didn't increase in the market in that day. Of course, there are exceptions, but for the vast majority of items, the value of the item doesn't increase "in a day." You simply took advantage of a market discrepancy.

"Flipping" is practicing arbitrage...NOT "investing."

Quote:

Originally Posted by jrs
If I choose to hold the item in the hope of turning a profit, it's a long-term investment. Simple as that IMO.

I'm not talking about "long term" or "short term", but the difference between an "investment" and "arbitrage", which isn't semantics, and have two distinct, and important, meanings.

8 years ago

Collector 1.86K	1.86K jrs private msg quote post Address this user	plus 1 plus 1 plus 1 1
	I'm not sure why risk is necessary to qualify something as an investment. Of course, an investment may carry risk; but is it necessary to risk losing money on a purchase in order for it to be an investment? That seems semantical to me. And even if arbitrage is at issue, why isn't that an investment approach? It is in finance, is it not?
	8 years ago	Post 56 • IP flag post

Collector 16.89K	16.89K DocBrown private msg quote post Address this user	plus 1 plus 1 plus 1 0
	Quote: Originally Posted by I_AM_IRON_MAN Quote: Originally Posted by DocBrown In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will be sold at a higher price for a profit." I don't think I need to whip out the definition of future, but future can be a short time after the fact, no? The length of time isn't the issue being disputed. I know it might seem like that, but it's not. The issue is the value of the item at the time of purchase.
	8 years ago	Post 57 • IP flag post

Collector 271	271 I_AM_IRON_MAN private msg quote post Address this user	plus 1 plus 1 plus 1 0
	Quote: Originally Posted by DocBrown Quote: Originally Posted by I_AM_IRON_MAN Quote: Originally Posted by DocBrown In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will be sold at a higher price for a profit." I don't think I need to whip out the definition of future, but future can be a short time after the fact, no? The length of time isn't the issue being disputed. I know it might seem like that, but it's not. The issue is the value of the item at the time of purchase. And the value is always determined by what someone is willing to pay/accept
	8 years ago	Post 58 • IP flag post

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Quote:

Originally Posted by jrs
I'm not sure why risk is necessary to qualify something as an investment.

Because without risk, you're not investing.

In financial terms, you're talking about saving.

Yes, in a grand sense, there's risk in everything, but if there's no underlying risk in the instrument itself...that is, your savings aren't subject to loss without the entire collapse of the Federal gov't...then it's not an investment.

Quote:

Originally Posted by jrs
Of course, an investment may carry risk; but is it necessary to risk losing money on a purchase in order for it to be an investment?

Yes, that's what "investing" means.

There has to be some risk of loss, or it isn't an investment, by the definition of the term.

Quote:

Originally Posted by jrs
That seems semantical to me. And even if arbitrage is at issue, why isn't that an investment approach? It is in finance, is it not?

Because it's essentially not repeatable.

Yes, of course, we have people flipping things every day, all day long, in various markets, all over the world. That's not what is meant by "repeatable."

I can't buy multiple copies of Tec #27 for $10, even if I'm able to buy a SINGLE copy at $10.

Since it's not repeatable, in any realistic, reliable way, it's not a sound investment strategy.

8 years ago

Collector 16.89K	16.89K DocBrown private msg quote post Address this user	plus 1 plus 1 plus 1 0
	Quote: Originally Posted by I_AM_IRON_MAN Quote: Originally Posted by DocBrown Quote: Originally Posted by I_AM_IRON_MAN Quote: Originally Posted by DocBrown In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will be sold at a higher price for a profit." I don't think I need to whip out the definition of future, but future can be a short time after the fact, no? The length of time isn't the issue being disputed. I know it might seem like that, but it's not. The issue is the value of the item at the time of purchase. And the value is always determined by what someone is willing to pay/accept Correct. But the value is NOT determined by what someone CAN pay (meaning, the price they're offered)...but what they are WILLING to pay. Important distinction.
	8 years ago	Post 60 • IP flag post

Collector 271	271 I_AM_IRON_MAN private msg quote post Address this user	plus 1 plus 1 plus 1 0
	Quote: Originally Posted by DocBrown Quote: Originally Posted by I_AM_IRON_MAN Quote: Originally Posted by DocBrown Quote: Originally Posted by I_AM_IRON_MAN Quote: Originally Posted by DocBrown In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will be sold at a higher price for a profit." I don't think I need to whip out the definition of future, but future can be a short time after the fact, no? The length of time isn't the issue being disputed. I know it might seem like that, but it's not. The issue is the value of the item at the time of purchase. And the value is always determined by what someone is willing to pay/accept Correct. But the value is NOT determined by what someone CAN pay (meaning, the price they're offered)...but what they are WILLING to pay. Important distinction. I don't see it. What someone is willing to pay/accept becomes FMV.
	8 years ago	Post 61 • IP flag post

Collector 16.89K	16.89K DocBrown private msg quote post Address this user	plus 1 plus 1 plus 1 0
	Quote: Originally Posted by I_AM_IRON_MAN Quote: Originally Posted by DocBrown Quote: Originally Posted by I_AM_IRON_MAN Quote: Originally Posted by DocBrown Quote: Originally Posted by I_AM_IRON_MAN Quote: Originally Posted by DocBrown In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will be sold at a higher price for a profit." I don't think I need to whip out the definition of future, but future can be a short time after the fact, no? The length of time isn't the issue being disputed. I know it might seem like that, but it's not. The issue is the value of the item at the time of purchase. And the value is always determined by what someone is willing to pay/accept Correct. But the value is NOT determined by what someone CAN pay (meaning, the price they're offered)...but what they are WILLING to pay. Important distinction. I don't see it. What someone is willing to pay/accept becomes FMV. Not true. What I'm willing to pay, and what I am required to pay can be, and often are, different. If someone asks $10 for a Tec #27, that doesn't make FMV for that Tec #27 $10, because I'm willing to pay much, much more....and there are a lot of other people willing to pay much, much more, too. I bought a Star Wars #4 35 cent copy for $1. But FMV for that Star Wars #4 wasn't $1. It was a lot more. And, in fact, I sold it for $900.
	8 years ago	Post 62 • IP flag post

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