Re: Is the stock market really a zero-sum game?


"galileomak" <galileomak@xxxxxxxxxxx> wrote in message
news:afd7297add8dfdcee0ca36dcdf549928@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
I think that it is a positive sum game.
I am not an expertise.

For example, If the world has only three people, me, a man that have a
company to build house, and a man want to buy house. I buy $1 share from
the building company. The company use $1 to make a house. Then the other
man use $2 dolloar to buy. The company share the $0.5 dollar profit to me
and he also get $0.5. Both get profit. So I think it is not a zero-sum
game.

Someone may aruge that he buyer lose. But I think it is not because he is
out of this game.

Any expert agree or disagree? I don't know wbether my concept correct or
not.


I'm not an expert, but that is not what most people look for in the stock
market. They often look for share appreciation To the extent of dividends and
stock buybacks companies put money directly back in the hands of shareholders
it is not zero sum. If you look at stock buyers and sellers as a fixed group
of people, in the ordinarily course of trading every dollar that someone (the
seller) takes out of the market comes out of another stock investor's pocket
(the buyer). So in that sense it is zero sum. But the group of investors is
not fixed - it is usually growing. So, in a sense, it is like a giant Ponzi
scheme. But this view does not take into account stock sales by companies,
stock buybacks, and dividends.

Bill


.

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