1. PRESENTED BY:ANU MISHRA 1

2. Investment Vs Speculation
Presented By: Anu Mishra
MBA 3rd SEM
PRESENTED BY:ANU MISHRA
B. U 2

3. What is Investment ?
• Investment involves making a sacrifice of in
the present with the hope of deriving future
benefits.
• Postponed consumption
• The two important features are :
– Current Sacrifice.
– Future Benefits.
PRESENTED BY:ANU MISHRA 3

4. Cont…
• It also involves putting money into an asset which
is not necessarily marketable in the short run in
order to enjoy the series of returns the
investment is expected to yield.
• People who make fortunes in stock market and
they are called investors.
• Decision making is a well thought process.
• Key determinant of investment process:
– Risk
– Expected Return
PRESENTED BY:ANU MISHRA 4

5. What is Speculation?
• Speculation is a financial action that does not
promise safety of the initial investment along
with the return on the principal sum.
• Its is usually short run phenomenon.
• Speculator the person tend to buy the assets
with the expectation that a profit cane earned
from subsequent price change and sale.
PRESENTED BY:ANU MISHRA 5

6. Process of Investment and Speculation
PRESENTED BY:ANU MISHRA 6

7. Investment vs. Speculation
Basis Investment Speculation
1. Basis of acquisition Usually by outright Often on Margin
purchase
2.Marketable Asset Not necessary Necessary
3.Quantity of risk Small Large
PRESENTED BY:ANU MISHRA 7

8. Investment Vs Speculation
Basis Investment Speculation
4.Insider trading analysis Not possible Based on insider trading
transaction happen
5.Stability of Income Very stable Uncertain and erratic
6.Sources of income Earning of enterprises Change in market price
7.Length of commitment Long run For a short time period
PRESENTED BY:ANU MISHRA 8

9. PRESENTED BY:ANU MISHRA 9