From an expected-value standpoint, is gambling the same as investing? [closed]
Closed as not constructive by Peter Taylor on Aug 27, 2026 at 19:47
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Who’s correct, and why? Vadim Ponomarenko contends
But Ryan gainsaid
I downvoted this. The first sentence is incorrect. By the way, a stock that has recently lost value has NOT necessarily also lost expected future value.
Why is, or isn’t, gambling (e.g. buying a lottery ticket) the same as investing (e.g. buying a share of stock) in terms of expected value?
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Gambling might refer to a random system or a game of skill, often with unpredictable elements.
The value of a stock depends on an extremely complicated (financial) system.
In some cases, gambling is done on closed, formal mathematical systems where you can calculate or find out the expected value. In some countries, sometimes the expected returns have to even be disclosed.
This is not the case for all gambling, and also not the case for investing in stocks.
Historically, the average value of investments has gone up, with various qualifications like they have to be spread wide enough, while in gambling, the average returns is usually negative.
So, mathematically, you are better off thinking about closed, formal cases versus complicated systems that can not be analyzed exactly, and then, on the other hand, what is the expected value. The natural language concept of "gambling" is not a mathematically precise, analytical concept, in general.
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