I came across an interesting article on the same topic in the link below. I have spoken about the same topic during my talks. Its funny how we use those two words liberally without thinking too much about what they imply.
It would be the norm to categorise someone who does short term trading as a speculator and to put a long term player as an investor. However, the term speculator implies high risk, while an investor implies more knowledge based and careful ways in investing.
What is the difference between a long term and short term investor. In Malaysia, a long term investor is someone who cannot get out profitably within the contra period ... "damn, guess I will just park it in my margin till it recovers".
Getting in and out quickly cause many to label them as risky but as recent history have shown, failure to cut your losses is the biggest risk you can have.
Wikipedia says that: Speculating is the assumption of risk in anticipation of gain but recognizing a higher than average possibility of loss. Benjamin Graham state that being an investor meant that: “An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.”
People get too caught up with the time horizon thing. You cannot be buying and holding a stock for two years and call yourself an investor. Time does not allow you to qualify as an investor. You can be a big speculator even when you hold the same stocks for years. When your mindset is plagued with "hope (that things will turn around)" or "pray (that somehow things will be better)" ... you are a speculator.
I can be an investor with a short time horizon as I may be buying on solid fundamental information and analysis, but I also go in only when other timing factors are in place (e.g. when I can sense catalysts that would rerate the stocks). Is that wrong when you buy and sell within a short period of time?
The main difference in terming a person as a speculator or an investor is how many fundamental variables of the stock, the business model and the macro side do you have in your grasp when you decide to buy. The lesser of the variables you have when you decide to buy, the closer you are to being a speculator.
If you cannot even tell me what a company does or where the company is going strategically or how they are going to be able to maintain their growth and margins, you are speculating in the stock.
Trading in and out for 10% or 20% within a short period of time (say a few weeks) does not make one a speculator. Holding stocks that you don't even know what the heck they are doing for years would be speculating.