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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (40823)	11/4/2003 8:52:37 AM
From: Maurice Winn	Read Replies (2) \| Respond to of 74559

Jay, so cutting to the chase, you invested $1000 for a few months and got $1300 back. The counterparties started with $1000 in value and ended up with only $600. The brokers and tax departments and cyberspace workers got the other $100. QUALCOMM issued no dividends. I ended up with a paper gain, yet to be converted to $. The Fed created some more $ while yous were doing your deals. So your purchasing power was diluted. For example, to buy a cyberphone or QUALCOMM share or house or anything else [on average, depending on where the item lies on the continuum of the infinite array of items with prices rising or falling around the current overall inflation rate]. Added up and bottom-lined, you are ahead, your counterparties behind, the brokers, service providers and tax department ahead, the $ pixelators ahead, me ahead. Your business is a zero-sum game, but with the pixelation process of new $ doing the same as the expanding inflationary universe, with Uncle Al taking those profits of the pixelation process, which are extracted from you and your counterparties. When QCOM pays me dividends, there's a non-zero-sum gain for me. My paper value is adjusted upwards as Uncle Al shrinks the measuring stick. True, I and the people at QUALCOMM, have provided a great big universe of options, stocks, jobs, cyberphones and taxes for all and sundry to dabble in and make profits from. But that doesn't mean I have lost value by the tax department taking some of your wealth or the broker having a holiday in Honolulu, or your cyberspace provider reporting bigger profits from all your clicking. Your profits are more in the nature of some mice betting which way an elephant will go; left or right. Being brave little mice, they get right out there in front of it, one to the left, one to the right, with a third party holding the bets. The one which gets skooshed loses and the broker gives the bet to the surviving mouse. Mqurice the mouse prefers to ride the elephant and hold the reins [a little like Gulliver in Lilliput with me a Lilliputian]. The elephant while grazing flicks some grain over his head to me in the form of yummy dividends. If you are a clever little mouse, you will be able to predict which way the elephant will move and collect a regular stream of yummies from your counterparty skooshed mice. But sometimes elephants take it into their head to go off in unexpected ways when they see yummy foraging somewhere else, which might turn out to be a mirage of shimmering wheat. Which means they stop flicking wheat to their riders and nobody wants to buy a wayward, waning, elephant roaming around, lost in the desert. Mqurice