Gambling or Investing

via Ritholtz, the Wall Street Journal:

Sometimes, the line between investing and gambling can be hard to see. Tony Emerson, an investor and gambler in Austin, Texas, said that what starts out as research-driven investing can turn into a blind gamble quickly.
"Consumer sentiment is impossible to predict," Mr. Emerson said. "Models and analyses that once seemed to work to predict stock movement failed when the economy crashed."
Still, it doesn't take a market collapse for the similarities to show themselves.
"The losses and gains are generally less dramatic than craps, blackjack, roulette or poker. But just like gambling, the more you risk, the more you stand to gain," Mr. Emerson said.
The real problem, according to Todd Tresidder, a former hedge-fund manager who is now a financial coach, is that most people don't understand the odds. He argues what sounds like card-counting the markets: knowing the math takes gambling out of the equation.
"If you invest like most people, there is no difference," Mr. Tresidder said. Investors, he argues, understand the odds. "The only way you will profit over time is either by sheer luck or by betting on positive mathematical expectancy situations," he said.
Mr. Tresidder has a point about knowing the odds, but don't a lot of gamblers know the odds? They pull the trigger, make the wager, or trade anyway. It is the thrill of betting that they love.
Maggie Baker, a clinical psychologist in Philadelphia, said that the neurological similarities between traders and gamblers are striking. Whether they are about to make a trade or plunking down a bet, the pleasure center in the brain lights up, Ms. Baker said.

The way I invest has to be gambling, but the house take is smaller, and the odds are that if the market is going up, new money will prop up prices.  If you sit down at a blackjack table, it doesn't really matter if another player sits down, the odds stay the same.  But if you buy 100 shares of Caterpillar, and a bunch of other people show up and want to play, you can make money from them playing.  It is an entire different animal.  Really, value investing is buying something which you think people will eventually want to buy, so you anticipate the price will go up.  That may or may not happen.  As the old saying goes, the markets can remain irrational longer than you can remain solvent.  I think it is gambling with more favorable rules.