What is a Play
Play is a slang term that describes the positive aspects of an investment decision. A play in investing is the reason why an investor made his or her decision. "Playing the stock market" is a phrase used by beginner investors signifying that they have gained access, simulated or real, to the ups and downs of the stock market.
BREAKING DOWN Play
Play describes the reasons that support the choice to invest or not. Investing in a stock is in no way a guarantee; there will be information supporting and going against any decision. Much like a football play, a decision is made using the given information at the time. Finding out if it was the right play will be determined at a later time.
The term play is used both conversationally and as familiar jargon in financial reporting and investment articles. It usually describes an investment decision. For example, take a look at the statements below, which reflect those typically made by investors.
Q: "Why did you buy that stock?"
A1: "It was a book value play, because the stock was trading well below its book value."
A2: "It was a long-term real estate play, because I believe the property value will increase over the next 10 years."
A3: "It was an infrastructure play on developing nations, because the company builds roads in developing countries."
Comparing Play and Pure Play
To get a better sense of how to use the term play in everyday conversation related to economics and finance, you can look to terms in financial news and reports that use the term in their reporting. For example, in a discussion of technology stocks, financial experts might call technology stocks a "safety play." This term relies on the idea of the investor as a player; if an investor is risk-averse, they may want to stick with safety plays, with the above example specifically advising these investors to buy technology stocks unlikely to generate large amounts of risk.
You may also come across the term pure play, as in pure-play company or a pure-play method. A pure-play company is one that has a sole focus on one particular product or activity. Active investors who want to get behind particular products or industry segments might be interested in pure-play companies. For example, Starbucks Corporation qualifies as a pure play because of its business focus on selling coffee. On the other hand a company like General Electric, which has a number of business lines and brands, would not qualify as a pure play.