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Finance: What is speculation? 6 Views
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Description:
What is speculation? Speculation refers to a high risk, high reward scenario in investing. When an investor engages in a speculation, they take on a huge risk (they could potentially lose all their money), expecting that they will actually reap a huge reward.
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Transcript
- 00:00
Finance a la shmoop what is speculation? wild bets crazy dreams invested upon the [Man placing bet and woman dreaming about money]
- 00:11
state lottery betting the ranch on red
- 00:15
drilling randomly on street corners hoping to find oil you don't want to do
- 00:20
that all right that's speculation the opposite of speculation in a sense is
- 00:24
well just real investing that is doing research on a company or an industry
Full Transcript
- 00:28
finding the megatrend it feeds into and doing the math on its earnings and [Man completing math work]
- 00:33
realizing that the company will in fact in two years earn more like five bucks a
- 00:37
share rather than three bucks a share that well everyone on Wall Street ie the
- 00:41
stock brokers are publishing and predicting speculation is just kind of
- 00:45
throwing money at things on a wing and a prayer and you know hoping for that
- 00:50
miracle yeah but doesn't usually happen so just be an investor
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