I’m going to start with meaning of the word “speculate” because someone has to be the adult in the room.
speculate spec·u·late [ spékyə làyt ] VERB
1. transitive and intransitive verb conjecture: to form a conjecture on the basis of incomplete facts or information
2. intransitive verb consider possibilities: to think over possibilities
3. intransitive verb make risky deals for profit: to engage in financial transactions such as commodity trading that have an element of risk, especially in the short term, with the hope of making a profit
4. intransitive verb take risks: to take risks in an attempt to achieve something or get some benefit
[ Late 16th century. < Latin speculat-, past participle of speculari "observe, spy out" < specere "look at" ]
Where in the world would we be if people like Nicola Tesla, Alexander Bell, Philip Farnsworth, Henry Ford, Chester Carlson, etc… hadn’t had investors willing to take risks on their ideas?
Hint: Farnsworth was a television pioneer. Chester Carlson was the inventor of the first copy machine (and by the way, Chester Carlson’s invention put a roof over my head and clothes on my back for a decade and half).
I think you can figure out the rest, all from a spectrum of seemingly innocuous to quite brilliant inventions. And this is just a tiny list. I defy anyone to tell me that nothing good came from the Dot.com era because I can point to plenty of them that started as “sepculative”. Heck, at one point, during the late 1990s, Apple was pushing up daisies.
Sure, for every one risk that made it big there were dozens or even hundreds that failed. But isn’t investing in risky ideas what made America what it is? Isn’t the free market the mechanism that determines what society values? I don’t understand why “speculation” is thrown around like it’s a dirty word when it is the best thing about and is at the very heart of capitalism and freedom. It is what gives us the freedom to dream big and have a chance at having it all on an individualized basis.
Speculative investing is not bad. Economic freedom is not bad.
If you want to know what is bad, I have three options to choose from. 1) Stupid people making uninformed choices about their money, and then whining and complaining. 2) Stupid people letting other stupid people make uninformed choices about their money, and then whining and complaining. 3) Big government, anti-capitalist, anti-competition, corporatist neo-cons wanting to use monetary policy to piss on everyone else’s parade, squash dreams into the dust so they can feel happy and content while everyone else is scratching a living off rocks – the elitists will decide who gets to have a good idea. From their perspective we average people have no real need for money or investment opportunities because we wouldn’t do the right things with them anyway. Have a buck and dream? Well, that’s just too darned bad. Where do you think Sarbanes-Oxley came from? It had nothing to do with the bad boys at places like Enron – and everything to do with the elitist view of the ignorance and stupidity of the “little guys” and thus a need to consolidate the investment channel. These people stare down their noses at average people as if we are subhuman with not an ounce of intelligence at all. But if I had to guess, they are likely most responsible for the mortgage/housing mess from being the engineers of the centralized investment channels.
No one spends somebody else’s money as wisely as he spends his own. No one invests somebody else’s money as wisely as he invests his own.
I get so frustrated at times with people who used to follow Ronald Reagan and Milton Friedman falling for the nonsense scare tactics that have the phrase “speculative bubble” attached; and I wish to God they would just WAKE UP – or we are going to have so much more mess to clean up than has already been made.