A history of confusion
One wrong question. Two catalyst confusions. A much bigger problem.
The master confusion, c. 1790s
Investing or gambling?
The question is already wrong.
In 1792, Alexander Hamilton was already sorting “respectable stockholders” from “mere unprincipled Gamblers.” The sorting has never been settled. Hamilton to Philip Livingston, April 2, 1792 · Founders Online
A blurred spectrum. No settled boundaries.
I respect the choices people make, as long as they are informed choices. What gets in the way? The intersections, where blurred lines hide what a choice really is: conflating investing and speculation, not knowing when speculation shades into gambling, and not appreciating that games are not the only way to gamble.
Why the lines blur
Clear lines would serve the public and create economic growth. But everyone who helps draw them faces a pull in some other direction, and the pulls are not always about money, either.
The label that earns more or costs less can win out.
Reversing an earlier position may be costly, so necessary adjustments become harder to make.
Calling yourself an investor feels better than calling yourself a speculator or a gambler.
Courts generally answer what they are asked and have little flexibility to consider larger questions.
Clarity is often traded away to pass a law within a window, and there are often unintended consequences too.
Each pull is already powerful on its own. Together, they can become nearly insurmountable.
Value investing
What counts as investing?
Is “value investing” a kind of investing?
How one label spread, and what it meant for how the law treats investing and speculation.
Read the case →Testing the default
What three AI assistants said when asked to explain value investing, and what none of them questioned.
Read the test →- Mid-20th century
Value investing
A powerful idea, and an expanded definition. Graham’s own editions, 1949 to 1973, never put the phrase in the subtitle.
- 1960s–2000s
Speculation as investment
Increasingly, speculative activity is treated, and sold, as investing.
- 2009–present
Crypto
A new asset class? Or a new application of an old confusion?
- 2020s
Prediction markets
Event contracts are both described and perceived as investments. Whether the label fits is the question beneath today’s jurisdictional debates.
Fantasy sports
What counts as a game?
Is daily fantasy gambling?
A decision tree of the New York question, and where the skill argument breaks.
Read the case →Testing the default
The same test, run on daily fantasy sports.
Not yet run- 1980s–present
Fantasy sports
Framed as a game, not gambling.
- 2010s–present
Daily fantasy sports
Extends the game framing, and wins legal acceptance.
- 2018
Murphy v. NCAA
Widely read as giving states the authority to legalize sports betting.
- 2020s
Prediction markets
Sports event contracts and beyond. Their regulatory and legal status is still contested.
Investing or gambling?
Different paths. The same unresolved question.
A family of confusionsInvesting, speculation, gambling, and games are not separate worlds. They are deeply connected: historically, legally, and economically.
Real-world consequencesWhere something falls in this spectrum can determine who regulates it, where it may be offered, what protections apply, and whether it is legal at all.
My work within the framework
This framework is the organizing problem behind much of my work. Different projects examine different parts of the same definitional confusion.
Markets, classification, and the expansion of “investing.”
Refining Howey: Investor Protection in the 21st Century
How distinguishing investment from speculation can sharpen the Howey test and restore investor protection to its proper purpose.
The Value Investing Myth
Treating “value investing” as a distinct style let speculation pass as investing, and led regulators to respond to the wrong problem.
How Alternate Finance Was Born
Calling investing “value investing” is a redundant qualifier that implies a non-value kind exists, and lets speculation pass as investing.
What Does the Spoon in the Matrix Movie Have To Do With Value Investing?
The phrase “value investing” is missing from the subtitle of every edition of The Intelligent Investor that Graham published in his lifetime.
Fantasy sports, sports betting, and prediction markets.
Unfinished Business: Sports Gambling After Murphy
State authority, federal law, and what remains unresolved.
Fooled: Fantasy Sports Is Not a Game
How the “game” framing concealed fantasy sports’ character as gambling and enabled the rise of daily fantasy sports.
Commodities, Contracts, and Casinos: Reading the Commodity Exchange Act as a Whole
Federal Preemption Has Been Barking For Years
Prediction markets, the CFTC, and the states.