A co-worker and I used to debate this very question.
He liked to play the stock market, and I liked to play the horses at the local track. In each case, we would do the following to decide on our investments and maximize our profits:
– Read the daily papers for the stock tables or the racing reports.
– Read specialized publications dealing with our respective interests (he’d read a stock publication; I would read the Daily Racing Form). We were each basically looking at past performances.
– Discuss our prospective selections with others like us.
– Accept or decline tips from those more in the know (stockbrokers or handicappers).
But while he would concede that we each used the same methods to make our selections, he stopped short of saying he was gambling in the same sense that I was. Rather, he was buying into an investment that may result in his investment capital growing. Of course, he may not realize what he is hoping for, or he may also lose it all, but it is an investment, and liable to risk.
My reply was generally, "I’m buying into a share on a horse. The pari-mutuel method of wagering ensures that if that horse wins, I get a share of the pool wagered on that horse. Of course, I may not realize what I’m hoping for, since the odds change, or I may lose it all if the horse loses, but it is a wager, and liable to risk.
He would say that he was buying into the investment over time. It may fluctuate over time.
I’d say that my wager fluctuated over time too. A shorter time than his, certainly, but fluctuation over time nonetheless. (For those of you who don’t know, the tote odds change as wagers are placed–the more money that backs a certain horse in relation to other horses lowers the odds on the certain horse. I can buy a tote ticket at one set of odds, but those odds can and probably will change between the time I buy my ticket and the time the winner is decided.)
He could sell his stock anytime, if he could find a buyer. At a profit, preferably. I could sell my ticket anytime–to anybody who didn’t feel like fighting the lines at the tote windows. For more than I paid for it, if it backed a prospective longshot.
The only difference that I could see (and that I would concede) is that my investment would be decided at a certain time. His wouldn’t be, at least not in the sense that mine would.
Note that I’m only looking at this from an investor’s point-of-view–that is, the decision one makes to invest in either stocks or horses, and the decision about which stock or horse to back. I’m not looking at where the money goes after the investment has been made (in his case, to the company he’s invested in; in mine, to other bettors if I lose).
I see a lot of references to casino gambling in this thread, but I don’t think casino gambling is really a good comparison to stock market investing. In casino gambling, the odds are set, and the outcome cannot generally be predicted based on past performance. In horse racing, you can look at past performance and daily conditions, and make an educated guess at who will win–and in the stock market, you can do the same.
Maybe this is more my humble opinion than an answer to a GQ, but given what I’ve stated above, I believe that playing the stock market is pretty much the same as gambling on horse racing. Except that playing the market is seen as more respectable.