The point I'm going to make is that we define labels in the way we wish to be perceived rather than by the facts.

I mean, can't we all get along? I say we can but only if we don't make personal communications a matter of semantics, which is something that lawyers and spin masters like to do.

I say we need to define words that reflect the "commonly accepted" reality.

Investopedia defines "investment" as the acquisition of property or another possession for purposes of future financial return or benefit. The Legal Encyclopedia says it is the placement of a particular sum of money in business ventures, real estate, or securities of a permanent nature so that it will produce an income.

Trading on the other hand is defined as buying and selling securities and financial contracts within a portfolio, to produce a total financial return consistent with risk, without the implication of possession and control.

So why do some of us (on the buy-side) continue to use the word "investor" rather than "trader"? It is simply because the sell-side wants us to. They want us to think of capital markets, not as prices, which they are, but in terms of the products and services they sell.

Today in the Toronto Star, a friend of mine, technical analyst Bill Carrigan, makes a statement ("Internet rich in tools for trading in bear market") that I find completely ridiculous, even if he does get the "Bear Market" portion right. But, I'll let you make that call.

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Carrigan writes:

"Don't forget, in a bull market, be an investor and in a bear market, be a trader.

The problem here is to define "investing" and "trading."

An investor will adopt a buy-and-hold strategy through the bull cycle, which typically spans about 40 months;

I do not suggest day-trading to be a suitable strategy for most investors. A trader will trade the intermediate bull cycle, which spans about 12 weeks;

Keep in mind that if your trade is not successful, the worst case scenario is you become a long-term value investor."

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What a crock.

Speaking of "long-term value investing", today, a leading portfolio manager, Legg Mason's Bill Miller, has come out in favour of buying shares of four major U.S. corporations.

Here is the Legg Mason bio on Mr. Miller.

And here is the year-to-date price performance of the four major stocks selected by Miller:

Going back to Carrigan's comment about an unsuccessful trade can be only as bad as a long-term value investment, besides the stupidity of the remark, I wonder what Bill Miller might say.

With respect to commenting on the Bloomberg piece today on Miller, I think the guy's simply cheerleading a market that is about to go into the dumpster.

Rather than value investing, or market timing (i.e., buying securities of good companies after they have fallen), I think Miller has a different agenda. I might think otherwise if the four stocks he selected did not aggregate so much weighting of the bellwether Dow 30 index.

I see this scenario all the time, which is that at the top of a long-term market cycle or early in the bottom of one, the portfolio managers like Bill Miller get a ton of media publicity for their Dow 30 picks.

It's all about marketing. The financial services industry long ago turned the capital market into capital marketing. So, I say ignore it.

Instead, private portfolio managers (i.e., you) need to pay attention to the best quality companies whose shares trade publicly and focus on the prices of those securities. Traders trade those prices for the reality I defined above.

As to other realities, Bill Carrigan is a better market technical analyst than he is an effective market commentator, but he is a good guy, and I do enjoy reading his column. And Bill Miller clearly is a successful public portfolio manager who may call himself a "value investor" but I call him a long-term trader (i.e., market timer).

You may perceive a different reality, which is why I say, "Can't we all get along?"