Whenever the price of something moves in the opposite direction of what the establishment would like to see, you can count on 'speculators' taking the blame. After all, 'speculators' seem like such an easy target. The term refers to no one in particular. After all, who speaks for the 'speculators'? They're a perfect scapegoat.
I personally think the whole point is moot...because in my opinion, everyone is a speculator. The main difference that I see between a long-term investor and short-term trader is the time frame of the speculation.
- Both are taking a risk.
- Both are dealing with an unknown future.
- Both are making decisions based on limited knowledge.
- Both are trying to buy low and sell high.
The long-term investor, however, is risking more of his valuable time in the hopes that he is correct. Since time is something that can never be made up, the stakes are much higher for long-term investors.
I personally take the longer-term view; but at the same time I don't look down on those who take the shorter...I believe they are valuable to the marketplace and help paint a complete picture of the market price. I also respect the fact that they are free individuals, making decisions based on their own assessments of the situation. Who am I to say that they should be 'regulated' or 'controlled' or 'curbed'?
At every price there is a buyer and a seller...both of whom are making voluntarily decisions. At the same time, both believe that they are correct in their assessments. So, to me, it's total nonsense to start pointing fingers at 'speculators' when the market price doesn't match what the establishment thinks it ought to be.
I'd like to close with a quote from Mises:
“Every action refers to an unknown future. It is in this sense always a risky speculation.” (my emphasis)
Aug 19 2008, 12:07 PM