STREET DOGS: Speculators
Extrapolators, visionaries, and gamblers
In The General Theory of Employment, Interest, and Money, John Maynard Keynes defined speculation as "the activity of forecasting the psychology of the market" and speculative motive as "the object of securing profit from knowing better than the market what the future will bring". It’s not hard to see how that differs from passive investing. "There are three kinds of speculators," says Thomas Maskell, "extrapolators, visionaries, and gamblers. Extrapolation is the act of projecting history into the future; therefore, the extrapolator must be a student of history. In that respect, they are similar to growth investors except they act on historical events that they believe will lead to growth." Jesse Livermore saw himself in that class. "Observation, experience, memory and mathematics are what the successful trader must depend on. He cannot bet on the unreasonable or on the unexpected, [but] must try to anticipate them. Like the physician who keeps up with the advances of science, the ...
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