Definition of investment; investment vs. speculation

An investment operation is one which, upon thorough analysis, promises
safety of principal and a satisfactory return. Operations not meeting these
requirements are speculative.

An investment operation is one that can be justified on both qualitative
and quantitative grounds.

 

Further on investment:

1. Business investment                  Referring to money put or held in a business.
2. Financial investment or             Referring to securities generally.
    investment generally
3. Sheltered investment                Referring to securities regarded as subject to small
                                                          risk by reason of their prior claim on earnings or
                                                          because they rest upon an adequate taxing power.
4. Analyst’s investment                 Referring to operations that, upon thorough study,
                                                          promise safety of principal and an adequate return.

Further on speculation:

1. Intelligent speculation                The taking of a risk that appears justified after careful
                                                           weighing of the pros and cons.
2. Unintelligent speculation            Risk taking without adequate study of the situation.

 

                                                                                               — Security Analysis