The speculation is a commercial or financial operation which consist to buy for sell or to sell for buy back, with the goal to profit from the difference in prices.
Don’t confuse speculative transactions from investment ones.
Benefic speculation in two levels
- Without speculation, new companies that have not yet shown their potential will never raise enough capital to grow.
- The buyer but the primary risk that the title goes down. In the meantime, the seller maintains a residual risk: the possibility that the title he has just sold can go up.
So don’t confuse this two things, the speculator search for a short time earn, instead the investor has a long vision of investment.
“market behavior cannot be predicted; we must learn to predict our behavior”
the results an aggressive investor can expect
Trading on market: short selling
Short selling is selling a title that I don’t have, to contract debts through the exchange mechanism.
The short seller objective is to take advantage of a subsequent drop in the price of these securities, by buying them back at a price lower than what they sold them for.
But if the price goes up, the losses could be unlimited.
Short-term selectivity
Buy actions of companies that declare, or they expect to declare, an increase in profits, or any other positive development.
Long-term selectivity
Growth is expected to continue in the future. In any case, the investor can choose companies that have not yet shown important results, but from which they expect a strong profitability in the future.