investment and speculation

invest: you buy an acre of farm selling for $6000...you can grow corns there and estimated you can sell them for a profit $800
speculate: you buy an acre of farm for $6000, want to sell it at higher prices next month

There are intelligent investors and intelligent speculators, both can be very successful~~



some speculation is necessary and unavoidable, for in many common-stock situations there are sub- stantial possibilities of both profit and loss, and the risks therein must be assumed by someone.

There is intelligent speculation as there is intelligent investing. But there are many ways in which speculation may be unintelligent. Of these the foremost are:
(1) speculating when you think you are investing;
(2) speculating seriously instead of as a pastime, when you lack proper knowledge and skill for it; and
(3) risking more money in speculation than you can afford to lose.

Speculation is always fascinating, and it can be a lot of fun while you are ahead of the game. If you want to try your luck at it, put aside a portion— the smaller the better—of your capital in a separate fund for this purpose.

Never add more money to this account just because the market has gone up and profits are rolling in. (That’s the time to think of taking money out of your speculative fund.) Never mingle your speculative and investment operations in the same account, nor in any part of your thinking.

source: The Intelligent Investor