Investment Vs. Speculation
I'm rereading "Margin of Safety" and came accross a great explanation of the difference between investing and speculating.
An investment gets it's value from the future cash flows it will produce. A speculation generates no cash flow and only cash they generate are from their eventual sale. The value of a speculation relies entirely upon the supply/demand of that item.
Any thoughts? I thought this was a great way of describing the entire concept of value investing. Buying things which are inexpensive relative to the cash flow which they will produce.