Excerpt from the book What I Learned Losing a Million Dollars:
“Speculation is forethought. And thought before action
implies reasoning before a decision is made about what, whether and when to buy
or sell. That means the speculator develops several possible scenarios of
future events and determines what his actions will be under each scenario. He thinks
before he acts. The sequence of thinking before acting is the exact definition
of the word plan. Therefore, speculating and planning are the same thing. A
plan allows you to speculate with a long time horizon (as an investor), a short
time horizon (as a trader) or on a spread relationship (as a basis trader or
hedger).”