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Sunday, May 29, 2011 | Comments (34)

Let me respond to some feedback that appeared in a different forum. I don't participate in the other forum, but the person who wrote this e-mailed it to me and invited me to respond. I'm posting my response here, because it might clear up some confusion other people have, too.

He writes,

I would disagree with him on this one [no losers in stock trading] to a certain extent. If I buy a stock at $10/share, and the value goes up to $20/share, ON PAPER it appears that ALL investors have earned money . . .BUT, that's only on paper.

That's simply untrue. It completely misrepresents how the stock market works. (See the links below.) Buying stock is an actual investment in a company. When stock value goes up, real jobs are created, company assets increase, and the potential for future profits is also increased. The increased wealth is not merely "on paper."

He further says,

If I decide to sell that stock, SOMEBODY has to fork out that extra money in order to purchase for $20 what I bought for $10. So, I am not sure if his attempt to show that the stock market has NO losers is air-tight. I seem to recall at the end of each stock trading day, there is always a report of the winners and LOSERS."

You are turning language on its head and unnecessarily clouding the whole issue. The suggestion that someone who invests in stock at a higher price has "lost" money is absurd. Apply that claim to the buying and selling of real estate and you'll see why it simply doesn't work.

And the "winners" and "losers" in the stock market report are stocks whose value rose (winners) or fell (losers). What I said was not an "attempt to show that the stock market has NO losers." And nowhere did I say there are "no losers in stock trading."

What I said was, "There are no losers when a stock gains value." The point is that in the stock market, the winners' gains do not come at the losers' expense. It's not really a complex point, but it is a significant one. In fact, it touches on the central point of my whole argument, so please don't let it get buried under a mass of unnecessary confusion.

Anyone tempted to comment further in this vein ought to do a little reading about the stock market and how it works. Many fine articles are easily available on line that show why investing in stocks is not a form of "gambling." See for example:

    Phil Johnson
    Executive Director


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    #1  Posted by Gh Yap  |  Sunday, May 29, 2011 at 4:01 AM

    I'm afraid that we need to view gambling from a broader perspective, perhaps similar to the subject of idolatry.

    In the case of stock market, a person is to do homework and be prudent putting his money there. Many do not even know what a stock market is and is going into it. I see people placing money on stocks that they do not know any thing about the stocks. You may call it "betting". This is gambling. There is element of greed and people can be addicted to it.

    You can find other situations harmless but can be turned into gambling.

    It is tough to explain what is not gambling. I believe one should know the charaters of gambling and what constitute gambling, and measure the situation against them. Of course, the line may not be clear sometimes and that is when we need to ask for wisdom from God.

    #2  Posted by Andrew Cairns  |  Sunday, May 29, 2011 at 6:17 AM

    The question of creating personal wealth through stock market trading is definitely a curly one for a Christian and I think that in respect to being compared to gambling it pretty much comes down to ones experience as a trader. For me to decide to share trade would indeed be a gamble as I would have absolutely no idea what I was doing. For the anonymous people who run the retirement fund that the law here in Australia dictate that I must make at least a minimum contribution to, it is much much less so, as their performance indicates.

    Given the focus on the issue of stock trading that has come from the previous blog on gambling, I would like to see a blog article examining the philosophy of stock market trading in the light of some of the other of our our Lord's requirements regarding the way we conduct our lives, particularly these three. That we live simply, do not store up riches on earth and do not create a stumbling block for others.

    I am of the opinion that PERSONAL stock market trading stomps all over these three unambiguous tenets of biblical instruction; and by personal stock market trading I am not referring to the making of contributions of a humble nature to a superannuation or pension scheme during a working lifetime with the goal of being able to avoid being a burden on my family in my old age (or some scenario along those lines) I am referring to actively participating in the advancement of my personal wealth by either directly trading myself or the acquiring of a personal account with a trading company (or any other scenario that attaches me intimately with the deliberation required in advancing my wealth expediently by trading shares etc.)

    The statement that stock market trading is complex, time consuming and driven by gossip and greed is, I believe, hard to argue with and equally hard to equate with the simple biblical requirement to live simply.

    The statement by our Lord and Master that we do not store up riches on earth does, i believe, get regularly and deliberately misunderstood. I do not conduct my financial life with the expectation of abject poverty, but I focus on my Master's requirement that I store not riches on earth by making very sure that I do not have complete control over my wealth. I stay at least "third party" remote from it and participate in a way that minimises the risk of being enticed by the potential of my own fallen nature. How, and to what extent I enjoy a standard of living is at the pleasure of my Master Jesus Christ and not the stock market. I am blessed enough to be born as a citizen of a wealthy first world nation.

    Not creating a stumbling block for others is the requirement that completely puts paid to personal stock market trading for me. The central tenet of stock market trading is to buy stock that is underpriced (necessarily from people who may not realise that fact) and hang on to it till any exponential rate of increase has all but expired before selling... to other people.

    #3  Posted by Edward Howell  |  Sunday, May 29, 2011 at 6:55 AM

    I didn't read your links but I would like to say I have many shares of Bank of America stock that I bought with an average price of $38 dollars a share. During the crash of 2008 it dropped to $3 dollars a share and is now around $12 a share. I lost several hundred thousand dollars. You can't tell me there are no winners and losers on the stock market.

    #4  Posted by Ronald Caruso  |  Sunday, May 29, 2011 at 9:22 AM

    Thanks Phil for everything, It has been interesting to get the general Christian perspective supported by your clear premise above.

    In summary: all Stock investing, even day-trading is Not Sin, and ALL gambling, even bingo/bunko is sin.) It doesn't get any clearer than that.

    At the end of all this, and i say with great Faith,NO AMOUNT OF BLOGGING, can change what my heavenly Father has shown me (gambling and stock market investing is a gray area where wine drinkers and smokers coexist), To which then leads me to follow His advice of Matthew 7:1-5.

    god Bless, Ron

    #5  Posted by Rudi Jensen  |  Sunday, May 29, 2011 at 9:54 AM

    Sorry but I can't see the whole point of it. Is this about materialism?

    #6  Posted by Darrel Robertson  |  Sunday, May 29, 2011 at 10:58 AM

    Phil I am so thankfull for Grace Church John Macarthur and his and I came from a Church to which you lost your salvation by spitting on the side walk, so to speak, My opinion here for what its worth is Christians... please relax and beath fresh Christian freedom air, do your investments wisely and use common sence and Gods word to guide you their is noting wrong with abtaining wealth, and long as you do it wisely...for example:

    Proverbs 28:20 says “a faithful man will be richly blessed, but one eager to get rich will not go unpunished.” This speaks against the “get-rich-quick” mentality. Looking at investment as a long-term plan for the future is good planning, but trying to make a fortune overnight is will most likely be trusting you riches and not the Lord...this was the rich young rulers problem.

    The word "Faithful" means he is holding through the long tearm!

    Money is a beautiful thing to have ong as you can bless another with it..but if it is used to gain selfish can distroy you...these truths are very simple to follow.

    Much of the Bible’s teaching about wealth is a warning against putting trust in wealth rather than the Lord (i.e. 1 Timothy 6:17-18) or to the detriment of those who depend on us (i.e. Ecclesiastes 5:13-14). As long as we honor our commitments to God and our families with our money, and maintain a spirit of generosity and thankfulness, investing is an excellent option Christians can consider.

    #7  Posted by John Donovan  |  Sunday, May 29, 2011 at 1:50 PM

    Stocks are a fractional ownership in a business.

    In buying a stock, you may also be entitled to dividend payments.

    If you own one share of stock, you are entitled to vote on things such as who gets to be on the board of directors. And if you own more a majority shareholding of a company, you essentially control the company.

    When you own stock, you are legally an owner of the business. You have a fractional ownership interest in every piece of real estate the company owns, every piece of manufacturing equipment, every one of their computers, and even their trademarks and patents.

    When you own stock in a technology company, there are engineers and R&D people who are working every day to improve products and invent new owns so that you, the stockholder, can earn more money.

    Some real estate companies structure themselves as Real Estate Investment Trusts so that their shares can be publicly traded. When you own a share of these companies, you are a partial owner of every piece of real estate they own.

    Stocks are not inanimate pieces of paper, but rather a legal structure allowing a business to take in investors.

    If I were to invest in the restaurant down the street in exchange for 10% of the business, you would not say I was gambling. If this restaurant then expanded into a chain and went public, am I suddenly gambling if I decide I want to buy more stock in them?

    #8  Posted by Dan Wilson  |  Sunday, May 29, 2011 at 4:48 PM

    I rather live a simple life than be rich. I rather be a doorkeeper in God's house.

    #9  Posted by John Del Gaudio  |  Sunday, May 29, 2011 at 6:02 PM

    When I became a professional day trader, I was shocked at how misunderstood my profession was. I grew tired of explaining how it worked and that it was not gambling. More absurd were the comments that trading was bad and investing was good. If we talk only about share price, whether trading or investing, we are "betting" on movement. If we buy we want it to go up.

    As a trader, I wanted to take as many trades as I could, of course. More movement meant more opportunity. Some days I had many trades and others I did not. I studied price movement and developed a system or method of trading whereby I did not take trades where the odds were against me. A gambler, on the other hand, trades or bets without the odds.

    So what is the difference between investing and trading? In the price context, it is largely time between trades and preparation. The investor's method requires him to study the company's and the industry's prospects. When satisfied he has the odds, he places his bet and waits for it to go up. The trader has studied market movement, develops his method and places trades during the day every time his method dictates a trade. (That is the only way to maintain the positive expectancy of the method.)

    I was a terrible "investor" because I just could not digest all the information and come to proper decisions. I could understand price movement, however. It made sense to me and I became a trader.

    I never once thought I was gambling. God blessed me with an ability and I thanked him for it. I never took a trade against my method except by mistake.

    Finally, the markets are not for amateurs. You are in there with the big boys, the guys who make the markets move: pension funds, insurance companies, etc. If you get on the wrong side of their trade you get squashed. Simple as that. So any method of trading or investing is an attempt to get on their coattails. If you do all your homework and come to an "intelligent" decision,or rely on a professionals advice, etc., you are really just hoping that your conclusions are the same ones the fund managers have arrived at. (If you are a big boy yourself, then you have your own rules. There is nothing you need to hear from me.)

    The real benefit of day trading was that I could get out quickly as soon as I realized I was wrong. No matter what I thought the price (big boy) should be doing, if the trade was going against me, I would get out and cut losses. If it turned out that my original assessment was correct, I would get back in. I was not gambling. Not even close. I was doing my job. (By the way, if I found myself praying in the middle of a trade, I took that as a sign that I was really wrong. :)) Also, I never held a position overnight. I would not have slept if I had. Some very bad things in the market happen over night. Remember that foreign markets are open while you sleep. I never wanted to wake up to a disaster.

    Anyway, that's what I think.

    God bless you all.

    #10  Posted by Simon Caneparo  |  Sunday, May 29, 2011 at 8:22 PM

    personally i don't see the need to gain money apart from the job the Lord gave me. but i cannot condemn the stock market in its essence. in my almost total ignorance, i understand that buying stocks is to partnership with a company, investing in a future growth. as in every field, speculation and greediness took over and nowadays there are many things that happen and little investors often lose their savings and the big fish get them all.

    my final thought is, i prefer to invest in heavenly things :)

    God bless

    #13  Posted by Luke Fulliton  |  Sunday, May 29, 2011 at 9:59 PM

    I write this with the utmost respect, patience, and love for everyone. I wish to attempt to shed some light if I am able on this subject. So here goes, to quote Phil from his response, “’There are no losers when a stock gains value.’ The point is that in the stock market, the winners' gains do not come at the losers' expense.” It is not really a complex point, but if it is central to his (Phil’s) whole argument, then I believe it would do him well, and any who agree with him on that point to read a little about what short selling, or selling short a stock means. Investors in the stock market do it everyday. (Due to website rules I am not allowed to post links providing further information, but you can google it for a quick explanation.) But to sum it up, bottom line there are losers when a stock gains value, Phil is wrong on that point. If Phil decides to short a stock that is valued at $10 per share, with the money in his IRA, and the stock rises to $20 per share, he will have lost money invested in that stock, while those that decided not to sell short, but instead go long the stock will have made money on the investment, while Phil was simultaneously losing his money. And visa versa, if the stock decreases in value to $5 per share, Phil will be making money while others are losing theirs. When Phil invests in the stock market through his IRA, he can either bet that it will go up, or that it will go down, and that is the difference between going long or going short a stock. Whether he goes long or goes short a stock, he is still gambling or betting that the investment will go his way and not the other guy’s. I know people who make money on stocks while the price is crashing, simply because they were shorting the stock. Those same people also make money on stocks by going long while the price is soaring, and others are simultaneously losing wealth because they are shorting the soaring stock. It’s a gamble, one way or the other. If gambling is sin, don’t put your money in the stock market.

    #14  Posted by Scott Carlson  |  Monday, May 30, 2011 at 7:44 AM

    This is the confusion that comes when we try to make absolute points about morality apart from clear Scriptural truth. Again this is not to say that Phil didn't bring up some good points. Some of his scholarship is very compelling. In my humble opinion, it may have been better to start with the biblical principle (eg. stealing) then include gambling as a possible application instead of beginning with an activity then trying to prove your own personal convictions.

    #15  Posted by Rebecca Schwem  |  Monday, May 30, 2011 at 8:32 AM

    #7John Donovan - Excellent comment and perspective.

    #9 John Del Gaudio- Great insight from one who knows by profession. Really helpful points.

    Thanks to you both.

    Can't help but notice on here that there are too many that speak with authority about which they have not near enough knowledge.I put a band-aid once on my paper cut. Because of that, do you really want to take medical advice from me?

    I don't have a study to support this but I do wonder how many use income that was acquired from wages earned by doing an honest day's work, doing a God honoring job to invest in the stock market vs how many invest in the stock market with money that was acquired by gambling online, in a casino, slot machine, lottery? I'm sure both is done. Just curious about the ratio?

    #16  Posted by Richard Bernecki  |  Monday, May 30, 2011 at 10:47 AM

    Phil, just one nuance to your comment "When stock value goes up, real jobs are created, company assets increase, and the potential for future profits is also increased." The only time selling stock affects the actual asset value of a company is when the company issues stock initially (IPO). In the simplest form, after the IPO, any sale of stock affects only the investors directly (buyers and sellers). Yes, I understand, if a stock price changes dramatically, the reputation of the company may change causing further impacts to the company. Real jobs are created, company assets increase, and the potential for future profits is also increased when the company generates operating revenue that requires growing the business. I hope this helps in the discussion.

    #17  Posted by Rudi Jensen  |  Monday, May 30, 2011 at 11:24 AM

    The true value of stocks is often based on "hot air", marketing gimmics and false expectations. Sin sneaks its way in to that area too.

    #18  Posted by John Del Gaudio  |  Monday, May 30, 2011 at 4:56 PM

    One major thing that I think distinguishes a gambler from a professional is that the pro is first and foremost a risk manager. His method of trading or investing must be based on an ability to manage risk. If not, he won't be around long. By the way, that's why you really don't see gamblers in the markets--they just get wiped out pretty quick.

    Did you ever consider that casinos are really not gamblers even though they are in the gambling business? Recall that the pro never risks his money against the odds and the gambler does. The casino knows all the odds and expectancies of the games through study and experience. Over time the casino always comes out ahead because it just works its plan day after day. Now say a plan has a 65% positive expectancy, meaning that you win 65% of the time and lose 35% of the time. Pretty sweet but remember that the wins are randomly distributed so they can all come at one time, wiping out the casino (or pro trader) The casino manages this risk by having enough capital to survive a long losing streak and by limiting the amount the customers can bet so that a series of large bets don't "break the bank." All the casino has to do is stay in the game long enough to realize the positive expectancy.

    Contrast this with the gambling customers: they just throw in the money hoping to experience the thrill of winning. (I never, ever understood that dynamic.)

    Just because the casino goes about its business in a professional manner, it is still in the business of providing sinful opportunities. I wish they would just all close up.

    Traders are a very good thing because they provide liquidity to the markets. When you go to sell your shares you put in your order with your broker who executes your trade---with whom? Well, somebody has to take your stock or you are stuck with it. That's where the trader comes in. If there is a lot of activity in your stock, then you can get a price close to your order, probably. If there were not active trading then the spread between the price bid and offer would be pretty big and who knows what price you will get. Active trading means liquidity, efficient pricing.

    There are plenty of greedy traders, to be sure. Just like there are greedy lawyers, doctors, accountants, pastors--you get the idea. (I am a practicing lawyer, by the way.) The markets are just neutral. They exist so people can buy securities. (Note I just say buy because somebody necessarily has to sell so you can buy. If nobody wanted to buy anything, there would be no markets at all.) How people go about using the markets can be sinful or godly--like most things.

    Bless you all.

    #19  Posted by Edward Howell  |  Monday, May 30, 2011 at 5:34 PM

    I can't believe the excuses used to say people who lose money on the stock market are greedy day traders or speculators for greed. Most people are not. Me included. I have a company that manages my accounts. They do all my buying and selling. Referencing my first post they purchased Bank of America which was the most secure bank at the time. None of the stock has been ever been sold. I lost money so there are winners and losers that are not greedy just investing but that is still a gamble. No guarantees. I think it is a sin to gamble your money away hoping to strike it rich but I don't think it is a sin to do it as entertainment. It seems some here just can't grasp there are degrees of gambling just like drinking etc that can become sin but other wise is not. Spending too much money on golf or ballgames is just as much a sin as greedy gambling.

    #20  Posted by Ronald Caruso  |  Monday, May 30, 2011 at 8:50 PM

    To quote my favorite Pastor and great man of God (as well as my mentor) J Vernon McGee of Thru The Bible Radio (Macarthur being second) on answering the question of gray areas (in his time it was about whether women could wear lipstick): "I can not be dogmatic where the Bible is not."

    I love that. I too cannot be dogmatic when the Word of God is not.

    I can be dogmatic in areas where the Bible is dogmatic, e.g., adultery, fornication, drunkeness, homosexuality, etc.

    But gambling,stocks,drinking a glass of wine,smoking (J Vernon smoked most of his life),and wearing lipstick,...who amongst us can be dogmatic and tell us their sin is a sin for all of us?

    When it came to the gray areas,Paul was right when he wrote 1Corinthians 8:9-13. To this truth, i choose to be bound...and dogmatic.

    In His Love, Ron

    #21  Posted by Donna Davis  |  Monday, May 30, 2011 at 9:09 PM

    If buying stocks and selling when the value goes up is wrong, then it is equally wrong for a christian to buy a house and sell it when the value goes up, perhaps the christian selling his house should sell it at the value it had when he bought it, not the increased current value. My bank account/IRA increases in value over what I personally put into it, perhaps it is wrong for a christian to accept this money. Investment and gain is not wrong, unless of course it's something illegal.

    #22  Posted by Matt Tocco  |  Tuesday, May 31, 2011 at 6:11 AM

    After reading the initial posts and the responding posts as well, dependent upon a persons motivation, there doesn't seem to me to be much of a difference in playing the stock market as there is playing the Lotto, or playing Texas Hold-em, or even "investing" in real estate for that matter. With selfish motives it's all a gamble taken for personal enhancement of wealth.

    We all rationalize what we do to make ourselves feel better about it. However, unless we are truly investing in a company through stock purchases for the sole purpose of ensuring it's growth in order to allow the people who rely in that growth to prosper, provide for their families and care for their communities, then it's just gambling. Even the most savvy stock market investors couldn't possibly know everything and are also unable to predict future curve balls thrown in a company's direction.

    And no one knows for sure the trends of future housing markets. Buying a home for personal use isn't any different then buying a car for personal use. We don't buy a car, use it daily, and expect a return on investment. If we purchase a home with the intention of a return it's a gamble. That said, if we have the funds available to purchase additional housing and allow others who wouldn't otherwise be able to afford it use it for modest compensation or nothing at all until they're back on their feet then we're investing in what God wants us to - His people.

    No matter what we say or how we attempt to justify anything God is vastly more than capable of determining our true motivation for everything we do. If we gamble His financial resources for our entertainment or for our personal wealth it's a waste of what He's allowed us. If we invest in His people He has guaranteed us an eternal and limitless return on investment.

    #23  Posted by Joseph Whiting  |  Tuesday, May 31, 2011 at 8:59 AM

    Thank you Phil for making it so clear.

    #24  Posted by Rudi Jensen  |  Tuesday, May 31, 2011 at 9:38 AM

    I read an article by Jerry Bergman with the title "Darwin's critical influence on the ruthless extremes of capitalism". Sometimes it helps to have a look behind the curtain.

    #25  Posted by Rebecca Schwem  |  Tuesday, May 31, 2011 at 11:24 AM

    I wonder if we can find another defense other than "life is a risk"? I mean, buying a house, buying a car,falling in love, walking across the street, going to your mailbox......yes, all these risks are just like gambling and the stock market. Come on now. This is starting to affect my some here think I'm dumb enough to fall for that.

    How many dads on here have advised their teenage son or daughter of choices that were too risky? You tell your son about drinking and the risks and how when he's tipsy, he's a target for somebody jumping him and robbing him. And of course, he tells old dad something he's never heard before...that nothing is going to happen and besides, everything in life is a risk.So now you're so comforted by your son's wisdom, that all left to do is pray for traveling mercies as he's drive to the bad side of town.

    Is it possible to come up with even more creative loop holes to sin than what I've read here?

    Let's talk about the charge of legalism. Jesus hated it. Let's see what Jesus had to say in Matthew 12:9-14. Jesus says, He went on from there and entered their synagogue. And a man was there with a withered hand. And they asked him,"Is it lawful to heal on the Sabbath?"— so that they might accuse him. He said to them, "Which one of you who has a sheep,if it falls into a pit on the Sabbath, will not take hold of it and lift it out? Of how much more value is a man than a sheep! So it is lawful to do good on the Sabbath." Then he said to the man, "Stretch out your hand." And the man stretched it out, and it was restored, healthy like the other. But the Pharisees went out and conspired against him, how to destroy him.

    The LAW was clearly spelled out and Jesus, the God Man violated it in order to show it was fulfilled, it obsolete. Now what? We can do whatever we want. No more law, no more law. We decide what we think is the right thing to do outside of the law.

    But wait, what about this? "You have heard that it was said,'You shall not commit adultery.' But I say to you that everyone who looks at a woman with lustful intent has already committed adultery with her in his heart." Matthew 5:27&28. What a contrast. Before all I had to fear was getting caught and punished. Now I have to worry about what's in my heart the fact that Jesus knows what's in it? Jesus just closed my loop hole.

    Seems to me....Jesus gave me the foundation. And seems to me He expects me to think and make decisions based on that foundation EVEN if the subject was not specifically mentioned by name (like the Trinity). Seems to me that Jesus expects me to understand references made without having to be slapped on the back of my head!

    I think those defending gambling should stand on a tree stump like Billy Graham did to practice preaching. Stand on a stump, put the biggest cross in front of you that you can find and practice your defense.

    #26  Posted by Craig Hurst  |  Tuesday, May 31, 2011 at 11:33 AM

    Phil, what about short selling or reverse trading?

    #27  Posted by Lawrence Mach  |  Tuesday, May 31, 2011 at 1:40 PM

    Phil, are you trying the justify the stock market? Clearly the readers, that understand the market, know the stock market is a gamble. They proved it in their responses and showed how basic your knowledge is in this area. The stock market is very complex but main goal is to make money...the more the better. It represents man love of money.

    The difficult question is how a God fearing man should use the stock market. Especially when it comes to saving for retirement and your child's education.

    Someone needs to better moderate this tread. This tread is not very spiritual and for the average reader who may not understand most of this discussion...they may perceive you/GTY is giving them a "green light" to use the stock market and all its lustful nature.

    #28  Posted by Rudi Jensen  |  Tuesday, May 31, 2011 at 2:27 PM

    Right trough marrow and bone Rebecca. I think it was Phil who once said that we must fight against those who claim the Bible is unclear.

    Not all Jesus said is written down, but we have sufficient. Sorry, but I can't imagine Jesus in a casino. Only to preach there.

    Phil said he would show gambling is sin. Give the man a 'chance'.

    #29  Posted by Tommy Clayton  |  Tuesday, May 31, 2011 at 3:10 PM

    Lawrence # 27 said:

    This thread is not very spiritual.

    Tell us exactly what constitutes a spiritual thread, Lawrence. Did you have any criteria in mind?

    #30  Posted by Dan Wilson  |  Tuesday, May 31, 2011 at 3:50 PM

    Two ways and one is harder.

    Don't look behind the plow. Jesus said to his disciples not to take extra things like coat, sandals, and money even on their journey.

    Remember Solomon, He grew rich with livestock, money, servants, and etc. He asked for wisdom also. He failed the test.

    In scriptures say it's harder for a rich man to enter the kingdom of God.

    Storing riches on earth would get moths and robbers to steal. Look for treasure in heaven that would not be ruin.

    #31  Posted by Bob Browning  |  Tuesday, May 31, 2011 at 4:57 PM

    To Edward in #3

    I can sympathize with you on the subject of losing money. My grandfather, in his old age before he died, made some investments that in hind sight were not good and it placed my father and me in a very difficult situation since he basically lost our entire inheritance. Slightly different than your situation, but in hind sight I could have mailed you a check for about $200k and been better off because you would have at least liked me for it.

    However, for the sake of clarity I think you need to read Phil's post again. You replied and stated "You can't tell me there are no winners and losers on the stock market." If you carefully read Phil's post you'll see that he actually says the following:

    "... nowhere did I say there are 'no losers in stock trading.' What I said was, 'There are no losers when a stock gains value.'"

    I really do feel your pain corresponding to an investment going bad in a way that is beyond your control, but for the sake of clarity we need to see that Phil's point is not that you cannot lose money in the stock market, but that the financial principals behind the stock market make it distinct from gambling. I hope this helps.

    God bless,


    #32  Posted by Steven Hals  |  Tuesday, May 31, 2011 at 11:23 PM

    I'll just say this. It seems to me that being a wise syeward of the resources entrusted to you is a way we how thanks to God for what He has provided. The tthe and offering are mandatory (in my opinion) and investment in His Kingdom with time, money, and your attention should always trump anything the world has to offer.

    What about Proverbs that states "a good man leaves an inheritance to his childrwn's children"? Or the woman in Proverbs 31 that considers a field and buys it? Is it so wrong to consider owning part o a company as well?

    One thing I'll say about personal stock investing is I believe a Christian should consider what a company does prior to investing their resources with them. For instance, there's one company out there that is all the rave right now with earnings, growth forecast, and has all the right ratios. Financial folks on here will know who I'm talking about (they shall remain nameless). I would not invest one cent with them, you know why? Because one of their primary and largest revenue streams is from selling yoga equipment and supplies. As a Christian, I cannot in good conscience support that industry with my money. Same thing with other industries whose primary earnings stem from vices that entrap people (alcohol, gaming, etc).

    I know there are very few truly Christian Companies out there, so I'm not advocating blocking out any & all companies that dont have a born-again CEO. My personal opinion is to have strong values in what one does choose to financially take part ownership of.

    On a further note, another market that pretty much everyone makes money at is the labor market (jobs, small business, etc). I do not entirely think its fair to cry foul about "losing" in the stock market when there are good, honest Christians that lose joba via layoffs, closings, reductions, outsourcing, whatever, and that is their ONLY source of income. Are they "gambling" too? Maybe where they went to work was a good place at the time (like BAC stock was), but for various reasons, and factors it is now going under. I would think to the Christian, the promises of Matthew 6:25-34 should be as solid a place to stand as any in regards tp guiding what (or rather Who) we really trust in.

    #33  Posted by Aaron Wahl  |  Tuesday, May 31, 2011 at 11:26 PM

    If we can't invest in the stock market, which at its basic level is buying ownership in companies, then we must also not purchase houses. Why can we buy a house but not a company? Yes of course there is abuse in the stock market, but there is a abuse in every area of life since the fall. Do we not participate in something because it can be sinful? Everything God has created can be twisted in some way.

    Purchasing shares of a company is simply having partial ownership of that company. So if that is not allowed, then every christian reading this that owns a business must sell it immediately. If I can't have a 5% ownership of a company then why is it okay to have a 100% ownership of a company?

    Taking risks is not necessarily gambling. Everything in life is risky; anybody driven a car lately? But when I purchase shares in a company, I am investing my money into a company and they are in turn taking that money and using it to further the company. If the company does well, then the shares I have in the company are worth more because the money I invested was used to create more wealth. Everybody should read Jesus' words when he tells the parable of the talents. The righteous servants were the ones that took what was given to them and invested it, because investing creates more of what was given. Its just a basic principle of a life. Every time you spend a dollar, you are making an investment. Whether it is on a house, a car, food, or even a company. The question is, what is the return on the investment. Well for food the obvious return is continued life. For a house the return is a more comfortable living arrangement as well as a hard asset that can be sold or traded. And of course hard assets are better to have because dollars are just paper. They have no value in and of themselves where as a house has value no matter what the currency. How about a car? Well the investment provides a negative return financially. Cars always depreciate. However, that car gets you from your home to your job, so the return is positive because it enables you to get to a job that pays you money. So all of these are good investments in their own way. How about buying stocks in a company? The first question to ask is, what is the return going to be like? You can research the company and see what services they provide. You can see what their plans are for the future and what they plan on doing with the capital you provide. And if you believe the investment to be worth the return then you go for it. There is nothing wrong with it at all. Now gambling on the other hand is different. Like Phil said, in gambling there is no wealth created. There is simply a transfer of wealth. The winner takes from the losers. Money put in is not used to create more wealth.

    Everybody must remember that money is not the root of all evil, but the love of money is. I invest my money to the glory of God, and I pray that he would use everything He has given me to further his kingdom

    #34  Posted by Lawrence Mach  |  Wednesday, June 1, 2011 at 7:13 AM

    To #29 Posted by Tommy Clayton,

    What I meant as "spiritual" is a thread that focuses on honoring and glorifying God. The original blog "Is Gambling OK? Don’t Bet on It" was a great discussion on gambling. This current thread appears to try to vindicate the stock market as an acceptable form of making money. The stock market is only a "tool"

    What concerns me is there are some "advanced" investors/day traders etc. asking some tough questions... I don't think anyone at GTY can read where their heart lies. You need to pray to God for the Holy spirit for guidance. ( that applies to all aspects of your life )

    The more you pray and read the Word of God, if God chooses to reveal himself to you, the answers to the questions come a lot quicker.

    #35  Posted by Corey Fleig  |  Wednesday, June 1, 2011 at 11:34 AM

    For the most part, I am very 'proud' if you will, with most of these responses. I commend all of you who think through the complex issues, as Phil does, to arrive at God-honoring responses. To God be praise for maturity and sound thinking.

    There may be other responses who create more confusion however, and it might be due to the fact that we live in a fallen world. I was impressed with the comments of #25 and #33 - Phil's points are also good because they are sound, in light of living in a broken world. If "risk" was always bad, then no one would walk out the door!!!

    The truth that there are losers when stocks gain in value might be due to the reality that our world is terribly inconsistent, unpredicatble at times, and beyond our control. So Phil is trying to be like the Proverbs, where general principles apply to a world that is fraught with exceptions.

    If you or I disagree with Phil, that's fine! The point is to do the best thinking with the available information, and glorify God as best we can in a broken world.

    I just gag when I see people buy lottery tickets, because there's no thought, no planning, no study, just the blind leading the blind on an invisible hope. My heart breaks for those who get lost in gambling on a hopeless idea.

    So, we continue to learn, and pray that God will help us, right?!

    #36  Posted by Mark Tanner  |  Thursday, June 2, 2011 at 3:01 PM

    Phil - "Investing" in the market is a GAMBLE no matter how you slice and dice it. Different from "day trading", which their are winners and losers and is done for sordid gain.

    The relevant question is it sin or is it not. For example, if you invest in a company that you know supports abortion through donations to planned parenthood or the AFL-CIO, known to take advantage of people, or anything that is ungodly, then is it right in God's sight to have anything to do with that company unless you absolutely have no choice, much less gain from such a company? What politicians are receiving donations that are anti-God???

    To try to simplify this to just "investing in a company" understates and minimizes the issue in my opinion.

    If you invest in a mutual fund that has stock in many companies; is it your DUTY, as a Christian, to investigate the company to see if it meets godly standards or okay to be the proverbial Ostrich with it head in the sand?

    I would venture to say you will not find a single mutual fund that invests in 10 or more companies (the vast majority) which God would look at and see as godly in it's practices and has much integrity in it's leadership.

    I am just playing the devil's advocate to raise, what I believe are legitimate questions, that Phil will have a tough time defending without just plain dismissing them. Why? Because the truth always stands in the face of deception. I'm not speaking of Phil being deceptive; he is my brother and a son of God, but the point is that if you were to scrutinize each company you will find, in almost all cases, deceptive and ungodly practices. Pharmaceutical companies are perfect examples or what about investing in a company that owns casinos or a Philip Morris who also owns food companies - do you see the point?

    What is the solution? I have none, but wish I did. I wish there was a mutual fund of godly companies in all respects, but that is a "pipe-dream". Although a company in and of itself is not a person; it is the leadership & employees of the companies that make up the company.

    We are living in a godless world for the most part and we are forced to buy from companies that, if the truth be known, we would be sickened by them, but we must eat and we must drive to work etc, but do we take those earnings and "Invest" in such? If you are a worker for a company and are asked to do something against God's will; would you do it knowingly - NO! What if it cost you your job or a promotion? So why would it then be okay to invest in such a company, which would be the majority on the market.

    As I stated earlier I am only playing "devils advocate" to stimulate some thought - hopefully.

    God bless all of you.

    One possible solution would be to invest in something tangible, such as gold or silver coins, but even that you must look at who is running the companies and what are their political affiliations. The other alternative is to put into a "local bank" and gain little to no interest.