Are we still Investing or now Gambling on PEP11

This is an important question that needs answering given reading the threads over the last few months BPH has questioned my whole reasoning for investing in the ASX.

As we await the approval or rejection of PEP11 i start thinking about the differences in both gambling and investing. I noted a key principle is to minimize risk while maximizing profits. But, when it comes to gambling, the house always has a mathematical advantage. In contrast, stocks generally constantly appreciate over the long term. This doesn't mean that a gambler will never hit the jackpot, and it also doesn't mean that a stock investor will always enjoy a positive return. It is simply that over time, if you keep playing, the odds will be in your favor as an investor and not in your favor as a gambler. So it gets me thinking with our capital investment in the hands of the politicians decision on PEP11 with political motivations at play have we now all turned to gambling our capital investment and turned away from the true reason we all started trading in the stock market.

This last few weeks has brought out the worst and best in some investors over the course of time in the BPH threads. I've read some nasty comments but also the brightness of kindness glow through when all seemed lost.

I realize now all this down ramping, up ramping, side ramping, and even reverse ramping does not matter. It doesn't matter one bit. We are at the mercy of the politicians PEP11 decision and nothing else. Our share price could be 12 cents today, 8 cents monday morning and it still doesn't matter. Once that announcement drops it will decide the share price and will trump all else. We either make money or lose everything we have invested. Its that simple.

Good traders take many losses – they admit they are wrong and keep the damage small. Not having to win on every trade and taking losses when conditions indicate they should is what allows them to be profitable over many trades. Holding losing positions after original entry conditions have changed or turned negative for the trade means the trader is now gambling and no longer using sound trading methods (if they ever were).

Gambling is often evident in people who do it mostly for the emotional high they receive from the excitement and action of the markets. Finally, relying on emotion or a must-win attitude to create profits rather than trading in a methodical and tested system, indicates the person is gambling in the markets and unlikely to succeed over the course of many trades.

So are we still investing in the ASX market or are we now gambling on this approval of PEP11?