zero sum game?????????????
- Thread starter madmunny
- Start date
In order for your agruement to be real then a stock/company must stay in business forever and can you name me three that have been listed and trading since the first day the NYSE stock exchange opened?
It's a zero sum game your just not looking at the big picture.
Taking about dividends, the unique valid argument that can support a non zero-sum. Unfortunately, there're very few companies that can pay dividends, most of them are in S&P500, compare to thousand other companies, probably 10000, that can't return money to their investors. Where are those moneys? They just been moved from one trader to anther trader.
this is not about n=1
this is about the stock market AS A WHOLE.
companies merge, some fail, some succeed, etc.
that is tangential to the reality. i agree with the others. there is no use discussing things with people who ignore facts while engaging their cognitive dissonance engine on overdrive.
i strongly suggest either a course in basic economics, or a discussion with any finance professor worth his salt. maybe an "argument from authority' will convince you because certainly an argument from rationality has not
to give another analogy, although i doubt it will help. zero sum game necessarily implies a "closed system". the market is not a closed system. companies grow. what are stocks. stocks are a PERCENTAGE ownership in a company.
i am not going to get into the issues of survivorship bias, but of course that is taken into account regarding the ENE's of this world.
i'm pretty darn good at game theory if i don't say so myself (i just did). i strongly suggest a study of game theory. game theory makes clear cut distinctions between zero sum games (the very term "zero sum GAME" comes from game theory) and non-zero sum games.
markets diverge from their means. that's what makes successful trading possible. if the market was purely rational, it would be boring as hell to trade, and all prices would instantly readjust to the intrinsic value of the entity underlying the security(ignoring for a second that the only way to determine the intrinsic value is really via a classic two sided auction).
if you can get it through your head that a COMPANY can create wealth, then it should not be hard to understand that a market of company shares can also gain growth.
when apple makes a computer, they create value by taking sand (silicon), plastic, etc. and making an item out of it that is greater than the cost of assembling these parts and their cost as raw product.
the market does a similar thing, but im getting tired of explaining it to you.
if you WANT a zero sum game, then look at the futures markets. fwiw, i do MOST of my trades in futures, and most of myinvestments in stocks.
there HAS to be a corresponding loss for every corresponding gain in the futures market. necessarily. it is the structure of the market. however, a futures contract is nothing more than an agreement. a stock is more than an agreement. it is a PART of a company. at a bare minimum it is the value of the buildings , free cash, and land value of the plants.
if you are a sucessful trader, more power to you. generally speaking, those who myopically stick to their opinions, when they have clearly been proven wrong, tend to make poor traders. but maybe you are an exception
in this marketplace, the marketplace of ideas, your idea that the market is a zero sum game is more than a falling knife. it is a rocket propelled bayonet, and trust me all you are doing by holding on to it, is shredding your hands and providing entertainment for those watching you on video.
this is about the stock market AS A WHOLE.
companies merge, some fail, some succeed, etc.
that is tangential to the reality. i agree with the others. there is no use discussing things with people who ignore facts while engaging their cognitive dissonance engine on overdrive.
i strongly suggest either a course in basic economics, or a discussion with any finance professor worth his salt. maybe an "argument from authority' will convince you because certainly an argument from rationality has not
to give another analogy, although i doubt it will help. zero sum game necessarily implies a "closed system". the market is not a closed system. companies grow. what are stocks. stocks are a PERCENTAGE ownership in a company.
i am not going to get into the issues of survivorship bias, but of course that is taken into account regarding the ENE's of this world.
i'm pretty darn good at game theory if i don't say so myself (i just did). i strongly suggest a study of game theory. game theory makes clear cut distinctions between zero sum games (the very term "zero sum GAME" comes from game theory) and non-zero sum games.
markets diverge from their means. that's what makes successful trading possible. if the market was purely rational, it would be boring as hell to trade, and all prices would instantly readjust to the intrinsic value of the entity underlying the security(ignoring for a second that the only way to determine the intrinsic value is really via a classic two sided auction).
if you can get it through your head that a COMPANY can create wealth, then it should not be hard to understand that a market of company shares can also gain growth.
when apple makes a computer, they create value by taking sand (silicon), plastic, etc. and making an item out of it that is greater than the cost of assembling these parts and their cost as raw product.
the market does a similar thing, but im getting tired of explaining it to you.
if you WANT a zero sum game, then look at the futures markets. fwiw, i do MOST of my trades in futures, and most of myinvestments in stocks.
there HAS to be a corresponding loss for every corresponding gain in the futures market. necessarily. it is the structure of the market. however, a futures contract is nothing more than an agreement. a stock is more than an agreement. it is a PART of a company. at a bare minimum it is the value of the buildings , free cash, and land value of the plants.
if you are a sucessful trader, more power to you. generally speaking, those who myopically stick to their opinions, when they have clearly been proven wrong, tend to make poor traders. but maybe you are an exception
in this marketplace, the marketplace of ideas, your idea that the market is a zero sum game is more than a falling knife. it is a rocket propelled bayonet, and trust me all you are doing by holding on to it, is shredding your hands and providing entertainment for those watching you on video.
I am amazed by your arrogance: u are saying that what u believe are infact proven facts and that anybody that disagrees with u is ignorant and plain wrong; u also gave a hint to stupidity therefore being offensive: there are many arguments supporting both our and your assertions and yet u insist on stating your version of the facts as an absolute true. this discussion has no point being just lost in semantics and won't help anyone to make money here given we are not newbs and understand the mechanics of the mkt pretty well. since u are extremely good at it, do us a favor and take your game theory elsewhere: nobody is going to benefit from it when opening their pos on monday morning.
it's not what i believe.
it is a fact
it is definitional, and anybody who understands basic economics/finance will agree
there are lots of things that are opinions.
heck, the classic joke about two economists applies "on the one hand, on the other hand" etc.
but this is not arguable.
it's definitional, and any economist - whether keynesian, galbraithian, or lord forbid marxian would agree.
stocks are PIECES of companies
companies grow wealth
there is no aspect of zero sum. read a book, dood.
here's another - tomato is a fruit.
you can argue it's not all you want, but it's a fact.
it's similarly definitional
it is a fact
it is definitional, and anybody who understands basic economics/finance will agree
there are lots of things that are opinions.
heck, the classic joke about two economists applies "on the one hand, on the other hand" etc.
but this is not arguable.
it's definitional, and any economist - whether keynesian, galbraithian, or lord forbid marxian would agree.
stocks are PIECES of companies
companies grow wealth
there is no aspect of zero sum. read a book, dood.
here's another - tomato is a fruit.
you can argue it's not all you want, but it's a fact.
it's similarly definitional
furthermore, this has nothing to do with making money. this is about the structure of the market. not a how to lesson
knowing that an apple is a fruit won't help you bake a pie either
but arguing it's a vegetable just makes you look either, just like arguing the stock market is a zero sum game.
knowing that an apple is a fruit won't help you bake a pie either
but arguing it's a vegetable just makes you look either, just like arguing the stock market is a zero sum game.
Using generally-recognized definitions, it is difficult to conclude that equity markets are zero-sum games.
http://en.wikipedia.org/wiki/Zero-sum
http://en.wikipedia.org/wiki/Zero-sum
May be I missed the point, but even the starvation caused by greedy dictators would not necessarily mean that they have hid all the cash underneath their fat dunlop.
All the cash has to be accounted for by some central banking system, and that may be deployed in various asset forms.
So someones books have to be balanced or cooked?
The poor in the US may be fatter for the first time in history, but that does not change the fact that there are more people living under the poverty line in the US than the total US population some 100 years ago.
And then how to account for the "convexity" where the population growth of the US in 1 year was greater than the total population of Canada?
There's food for thought for MM.
All the cash has to be accounted for by some central banking system, and that may be deployed in various asset forms.
So someones books have to be balanced or cooked?
The poor in the US may be fatter for the first time in history, but that does not change the fact that there are more people living under the poverty line in the US than the total US population some 100 years ago.
And then how to account for the "convexity" where the population growth of the US in 1 year was greater than the total population of Canada?
There's food for thought for MM.