SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Are you considering quitting your dayjob to daytrade?!

 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: milesofstyles who wrote (418)1/24/1999 3:58:00 PM
From: chalu2  Read Replies (1) of 611
 
The question of whether the market is a zero sum game is not relevant to anyone's individual market experience. I'll take a crack at tackling this question anyway, since it is interesting.

As I understand it, the market would be a zero sum game, if for every hundred dollars I gain, someone else loses a hundred. Now, if A buys AOL at $100, sells it to B at $120, who sells it to C at $140, we have A with a $20 profit, B with a $20 profit, and C with high hopes. Obviously here everyone but C has won, and C hasn't lost. That's not a zero sum game.

Applied to the market as a whole, if the market generally advances, creating larger and larger market values, then it becomes a fallacy that for every $100 made, $100 is lost. That logic only works in closed, static value systems. Given the history of the US markets, it has actually been possible for investors ON AVERAGE (that is the key mathematical concept here) to "win"--ie., come out positive. Thus, the market has simply not been a zero sum game.

Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext