Q: I’ve been speculating in commodities and futures for 10 years. While my track record is terrible (one profitable year out of 10), it has been great fun. Why shouldn’t an investor experience the thrill of a possible home run?
A: They should, if they can afford it, but I must admit I choose not to do it knowing the odds are stacked against me. As a wise man once told me, “Don’t play in a game you don’t have an advantage.” I think it comes down to how much you can afford to lose permanently. It’s one thing to lose half of your money on the S&P 500, but it’s entirely different when you lose half of your money in a strategy that is very unlikely to work over the long run. Of course speculators often think they are going to get it back on the next opportunity.