Ben thought most, but not quite all, trading involved speculation.
"Everybody knows," he wrote, "that most people who trade in the market lose money at it in the end. The people who persist in trying it are either (a) unintelligent, or (b) willing to lose money for the fun of the game, or (c) gifted with some uncommon and incommunicable talent. In any case they are not investors." (p12 of my copy)
On p245.he explains his theory of diversification
"There is a close logical connexion between the the concept of a safety margin (ie never pay more.for a share than about two thirds of its estimated value) and the principle of diversification.... Even with a margin in the investor's favour, an individual security may work out badly. Foe the margin guarantees only that he has a better chance for profit than for loss - not that loss is impossible. But the more the number of such commitments is multiplied, the more certain does it become that the aggrgate of the profits will exceed the aggregate of the losses."
In other words,
"What we loses on the roundabouts we makes up on the swings."
(as Bill Shakespeare might have put it.)
