Neither way leads to wealth - defined as a command over more or better sources of satisfaction for the expenditure of the same or less effort. The second is the illusion of gain in those paper titles to the future we call equities. We are not now staking a claim on any credible provision of future resources and we should realize, as we chase earnings and post-hoc projections of growth ever higher, that the gap between anticipation and outcome is likely to yawn all the wider the more of the economy's posterity we mortgage today to wager on the result. But, when the extra credit is being fuelled directly into those assets, there comes a point when all we are doing is contributing to a whorl of instability - that is when we have a Bubble before us. Inflationary booms are of course great fun.
Life is exciting.
Where our leveraged speculations have paid off, say on our house purchases, we no longer have to wait to enjoy their succulent fruits, or go through the trauma and loss of face of moving down the ladder or out to the suburbs, Wall Street will help us monetize the gain immediately with a nice friendly equity withdrawal loan. No-one is Old in a Bull Market. Then there is the Market itself. While we play lotto with the four-letter counters which circle endlessly across the ticker tape, we convince ourselves that we are not only being prudent and saving, but that we are helping to build a shining new world for us and our children to enjoy, by providing capital to the corporate giants of tomorrow. We are all Livermores and Raskobs and Baruchs, Soroses and Steinhardts, when CNBC calls the open higher.