Can someone explain that concept in the following example. Trader 1 buys Stock A at $10 and sells it to Trader 2 at $15. Trader 2 sells Stock A at $22 to Trader 3, who in turn sells it for $25. Who lost money in this scenario. My contention is it is not a zero sum game as there is a historical upward bias in the market. (yes, i understand stocks go down as well, but historically the Dow has gone from 74.10 in 1916 to 12795 in 2007, easily proving this upward bias)
2007-04-11 20:12:20 · 5 answers · asked by Romans 1:22 4 in Business & Finance ➔ Investing
The stock market is not a zero sum game.
The options markets and futures markets are zero sum games.
2007-04-12 04:28:39 · answer #1 · answered by Ranto 7 · 0⤊ 0⤋
Your example is fine. The stock market is not a zero sum game. You're buying a piece of a company and that company is a collection of people all working hard doing or building something. Over a period of time they build something that's more valuable than the money put in and thus it deserves a higher price than the price paid.
2007-04-12 03:19:47 · answer #2 · answered by Mack 2 · 0⤊ 0⤋
Your example is to simple in understanding the complexities of the stock market. There are millions of investors, not just your 4. And they are buying stocks at all different prices at all different times. Their cost basis is unkown because of all these variables so they can be making a profit or a loss, no way of knowing.
2007-04-11 23:10:06 · answer #3 · answered by BangkokBob 4 · 0⤊ 0⤋
Ever wonder how the blind were leading the blind in the stock market in planet of apes?
The name of the games is how to outsmart the competitor and leave them with the bull shits living in misery in planet of apes.
If you were out to look for cash.
Never set a target on what you want in planet of apes.
Just go out there and pick up the cash that others leave for you in planet of apes.
With time will be hitting the home-run with those living in misery being left behind with time in planet of apes.
While having a good V-a-c-a-t-i-o-n in planet of apes.
Once the pocket is empty come back and pick up againfor the next trip in planet of apes.
Ever wonder why are we chasing the great American dreams of puff the magic dragon that turn into smokes and ashes living in misery in planet of apes?
2007-04-11 20:30:09 · answer #4 · answered by Anonymous · 0⤊ 0⤋
In order for you to win, someone must lose!
2007-04-11 20:17:23 · answer #5 · answered by Anonymous · 0⤊ 0⤋