Am I a speculator?

Short answer: Yes.

Longer answer: If you own something and do not trade it for something else, you bet (or "speculate") that that which you own doesn't decrease in value or that it even increases in value. Hence, if you own dollars, euros, pounds, gold, crypto currencies, stocks or anything else, you are a speculator.

Long answer:

First of all, let me point out that most people avoid referring to themselves as "speculators", even if they do consciously speculate. They use euphemisms like "trader", "investor", and so on. This might indicate that they assume speculation to be somehow not correct or evil. Or that they fear that others may assume speculation to be somehow not correct or evil. In another posting I argue that speculation is not evil. The most obvious reason why speculation is not evil is that there is no way not to speculate and something that nobody can avoid doing can not reasonably be considered to be evil.

What is speculation anyway? In a wider sense, to speculate is to take a decision under uncertainty. Let us look at speculation in this wider sense first. Can speculation taken in the wider sense be avoided?

Obviously, there is no way to avoid decisions. Life basically consists of a series of conditions we cannot control, the series of decisions we take, reacting to these conditions, and the consequences of our decisions. At any point in time there are choices. You may get up and make coffee or you may not get up at all. Or you may get up and make tea, and so on. You might object: What about doing nothing? Doing nothing is always a possibility. Should you climb that mountain? In this case to do nothing would be not to climb the mountain and, hence, a choice. Should you study chemistry? To do nothing would be not to study chemistry, and, hence, a choice. Obviously, he who does nothing, also takes a decision. So, whatever you do, you take decisions.

Hence, I think it is safe to assume that there is no way to avoid decisions. But it might still be possible to avoid speculations. If a speculation (in the wider sense) is a decision under uncertainty, you might simply make sure that all your decisions are taken under certainty, i.e. that you are always sure about the consequences of your decisions.

It is easy to see that in life there is no such thing as certainty. There is always an unlimited set of facts that we do not know. Will you have success, and that includes financial success, if you study, say, chemistry? That depends on many things that you cannot control or predict with certainty. All you can do is speculate. You might speculate that if you study chemistry, you will like it, that you will be good at it, that the market will be such that you will be able to find the job you want, that you will make enough money, and so on.

Financial speculation is not different in any way from the rest of the speculations of which your life consists. At any point in time you own a certain set of things, such as your clothes, tools, food, money, maybe a car, maybe a home, maybe gold, maybe cryptos, and so on. And at any point in time you decide to trade or not to trade some or all of these things for other things whose possession might be more advantageous for you.

The most obvious case of financial speculation is owning vs. not owning "normal money", also known as "fiat money". Fiat money is issued by the state. I.e. the state makes it and the state controls, to a large degree, its value. Hence, by not trading your fiat money (dollars, euros, pounds, etc.) for something else, you speculate that your fiat money will keep its value. This speculation is most probably wrong. The vast majority of fiat currencies have inflation, i.e. they keep losing value. This is the state's way of speculating: The state speculates that you will boost the economy by doing something with your money, because your money keeps losing its value. Hence, the state speculates against you. Why do you not speculate back?

 

Terms of use | Data privacy statement | Contact

© 2025-2026 Lektiko GmbH. All rights reserved.