Parameter | Investor | Speculator |
Investment Thesis | Investment based on durable competitive moats | Investment based on disruptive and cool industries. |
Time Horizon | Long term(>5years) | Short term (single/few days) |
Risk Undertaken | Reasonable risk | High Risk |
Return Expectations | Expects consistent return over time | Expects abnormal returns in short time |
Mentality | Sticks to fundamental analysis for the long term. | Jumping the bandwagon from one stock to another |
Risk Capacity | Risk averse | Readily takes more risks |
Decision | Based on careful considerations and fundamental analysis of the company and looking into margin of safety, future prospects, dividends etc. | Based on intuition, rumors and charts, hopes, market psychology, opinions, etc. |
Source of investment | Own money invested | Usually borrowed money in the form of leverage from brokers |
Attitude | Sees stock as ownership in the company | Sees stock as a tradeable paper. |
Type of persons | Cautious and Conservative | Aggressive |
Analysis Type | Fundamental Analysis based on experience and past performance of company | Technical Analysis based on gut feeling |
Valuation Approach | Based on absolute values and margin of safety | Based on relative valuation |
Moto | Cash is King | Winner takes it all |
