7. Finding God in the Financial Trading Marketplace

Is God working in the financial trading marketplace?

If you have read my first few blogs, I wrote about why trading is not a sinful activity. It seemed like I was just trying to defend my position as a trader.  Don't get me wrong, I was not trying to promote financial trading in any way.  In fact, financial trading is a very a risky business. It is definitely not the most glorified business as far as value added to the society is concern.  The society tends to see financial trading a "a sinful, non-value added" way of earning a living.  Even the idea of giving money profited from trading, to the needy can sometimes seen as "Robin Hood style giving".  The society often see financial trader's method of gaining profit by taking advantage of the financial system and exploiting the weakness of the general public due to the lack of knowledge of the system, "immoral and evil".  When traders give to the needy, they are viewed as "Robin Hood" giving to the poor, especially for those who intentionally trade to give to the poor.

So, let us come back to the basic question..."Is God working in the financial trading marketplace?"

 

There is always a reason and purpose why God placed us in a specific job in a particular time of our life.  Some may be doing something that they like, some may be doing it for money and survival, but ultimately, it is for His purpose as stated in Proverbs 19:21..."Many are the plans in a person's heart, but it is the Lord's purpose that prevails." Surely, God would not be placing a person in a particular job if there is no purpose. In fact, I believe that God has a plan for everyone and everything He created in the universe and the only reason for Him to create all these is to glorify Himself for He is the creator of all things. God has called man and given them the wisdom to create a financial system so as to benefit the world He created. Jeremiah 29:11..."For I know the plans for you," declares the Lord, plans o prosper you and not to harm you, plans to give you hope and a future". If God has a hand in the creation of the financial system, then, does not it make sense that God is also working in the financial trading marketplace? 

 

The next logical question most people will ask, "If God is good and He created the financial system for the good of man, then why is there so much sins and evil in the financial world? Why is the money of so many innocent people, especially Christians who committed their lives to Him, lost their investments in the financial system?".

 

A lot of us, especially those who experience the pain and agony of loosing all their life saving overnight in the global financial crises in 2008, found ourselves asking these questions, many doubting the existence of God. Much faith were tested and lost. Firstly, if the purpose of creating the financial system is good and God's purpose of this creation is to glorify Himself, logically, the last thing God would do is to create something that will defeat that purpose.  Secondly. the answer can be found in John 3:19 (NIV)..."This is the verdict: Light has come into the world, but people loved darkness instead of light because their deeds were evil." or  MSG version says..."God's light streamed into the world, but men and women everywhere ran for the darkness. They went for the darkness because they were not really interested in pleasing God."  Men and women who were called to serve to create and manage the financial system which is for the good of the people, decided to do it not for God's purpose but for their own gain. 

 

Then why did God allows this to happen?

 

I found a good answer from an article "Why Does God Allow Evil?" written by Rick Warren in his website Daily Hope with Rick Warren on May 21, 2014.  Rick Warren said, the answer lies in what is both our greatest blessing and our worst curse: our capacity to make choices. God has given us the freedom to decide how we will act and the ability to make moral choices. Every one of us is capable of making selfish, self centered or even evil choices...which ends up as sins. Unfortunately, sin always hurt others, not just ourselves.  God could have eliminated all evil from our world by simply removing our ability to choose. But God doesn't want us to be puppet. He wants to be loved and obeyed by creatures who freely, voluntarily choose to love him and each other. Love will not be genuine if people are not given the freedom to choose. So don't blame God for all the bad things that happened to us that are created by men and women by their own choice.

 

Whether is it in church or at home or in the marketplace, God is always working for His purpose. Romans 8:28..."And we know that in all things God works for the good of those who love him, who have been called according to his purpose.". The truth is God is working amongst us in the financial trading marketplace, but He is asking whether you are willing to join Him in His work for His purpose and for the good of those who love him, who undoubtedly includes you.

 

Romans 8:28..."And we know that in all things God works for the good of those who love him, who have been called according to his purpose."

6. Is Trading Gambling?...Conclusion

Is Trading Gambling?...How to Differentiate?...Conclusion

We have looked into various comparisons of gambling, trading and running a business in the last two posts. Let us summarized the similarities and differences in the following table: 

Characteristics	Business	Trading	Gambling
Risk taking required.	X	X	X
Uncertain Outcome	X	X	X
New wealth created.		O	O
Success achieved in a short term.		O	O
Outcome totally by chance			O
Outcome affected by economical, political and environmental factors.	X	X
Part of the outcome can be controlled by participant.	X	X
Value Add to the society or the market	X	X
Probability of success increase with knowledge and effective market study and analysis.	X	X
Pits their skills against the market players.	X	X
Can withdraw from the activity anytime.	X	X

Are we able to clearly differentiate gambling and a non-gambling from the comparison seen above? As you can see, there are only two characteristics of trading that are similar to gambling. They are: 

• No new wealth created and 
• Success achieved in a Short term. 

Unfortunately, these are the two reasons why trading is perceived as gambling for most people, which was discussed in my first post on Is Trading a Sin...A view from Michael J. Gutmann.

There are obvious characteristics in gambling that are similar to trading and running a business. In fact, some these  We can see that all three activities requires some level of risk taking and all three do not have a 100% certainty in their outcome.  Just like a lot of things in life which do not have complete certainty in their outcome, we do not claim all these to be gambling if one participates in it. A good example is investment which has a lot of similar characteristics to running a business, like risk taking and uncertain outcome. But very few people will say one is gambling if he invested his savings in stock or bonds, hoping for a return of investment which is higher than putting in a bank to earn interest. Like trading and running a business, he is also participating a some level of risk taking. So, is taking risk gambling? Well, not everyone will agree with this statement. 

Let's take another point in the list above, the amount of time within risk taking activity, to see if this is a good argument to say an activity is gambling or not. Take the example of the chicken seller who who chose just to do his trade only within the business day and do not leave any overnight. Does that makes him more a "gambler" then those who do their business with a longer term view? Is there a big difference between a day-trader and the chicken seller with the way he conducts his business in a short time frame? 

We can go through the same argument over each of the points stated above and you will notice that there is a counter gambling argument for every gambling characteristic. However, in a closer look, I felt that there is a set of key characteristics when combined, can almost always say the activity is gambling if all of the following are present: 

• When risk taking is required and the outcome is uncertain. 
• There are no new wealth created. 
• When the activity does not add value to anyone other then the participant himself. 
• When the outcome of the activity is completely or almost totally by chance. There are a couple of scenarios that this can be met:
• When one continues to participate in the activity without any knowledge of the probability of the outcome that is able to guide him to a reasonable and logical decision whether or not to participate in the activity. Any favorable outcome from it is totally by chance.
• When one continues to participate in an activity knowing that the probability of a favorable outcome is low.  Any favorable outcome from it is totally by chance.

The above four characteristics are always found in an act of gambling whether it is done in the casino or in the trading market or even in running a business. For example, you will notice that both business and trading can both be made into gambling if one chose not to ignore some of the important factors or characteristics stated above. A trader is considered to be gambling if he enters a trade without a thorough analysis to understand the current state or trend of the market. There are traders that make their decision purely based on recommendations from brokers, analyst or even based on the high volume of participation in a particular market, without any knowledge or without any analysis of the stock that he is buying. Any outcome regardless whether it is favorable or unfavorable is totally by chance. There are also traders who did all the necessary analysis and found that the odds is not in their favor but still continues to proceed with the trade hoping they will be "lucky" to get it right. In most cases they will be wrong for they are gambling in the financial trading market. 

Conclusion

The most basic characteristic of gambling is risk taking. But there is a difference between "calculated" risk and "mindless" risk taking. "Risk" is taking a chance and "calculated risk" is taking a chance after considering the probable outcomes. One must factor in the implication of the outcome as well as the probability of such outcomes. Gambling is risking taking without the process of understanding the probable outcome or taking risk knowing the probability of the outcome is unfavorable.

I once read an article from Jason Zweig who writes The Intelligent Investor for Wall Streets Journal. 

He said: “We underestimate the likelihood and severity of common risks and overestimate the likelihood and severity of rare risks. When we feel we are in charge and we understand the consequences, the risks will seem lower than they truly are. When a risk feels out of hands and less comprehensible, it will feel more dangerous than it actually is.”

Life is filled with opportunities for risk taking. Be it in business, at work, trading, or even deciding which destination for your vacation.  The question is whether efforts were made to understand what one is stepping into so as to increase the probability of a favorable outcome. For non-traders who thinks trading is gambling, maybe the lack of knowledge or understanding of financial trading makes you feel that it is more dangerous than it actually is...thus claiming it to be gambling.

Proverbs 2:11...Discretion will protect you, and understanding will guard you.