If the company does a buyback, they pay the current market price when it occurs. For every dollar that the stock is above the ipo, the company then loses that dollar to the investor.
There were plenty of explanations from experienced traders (the guys from the field) that the stock market is a ZERO-SUM. Unfortunately, they still believe with the point of view from the academic side that have no clue of what really happen in the field. The only way to convince them that the market is a zero-sum game is to let them go in the market (in the field) with this belief and come back later to tell us the story. I bet they will change their mind once they're on the field for long time enough. By the ways, if a soldier from the battle field tell you the story of the war and a professor of the military academy tell you the story. Who do you believe? The professors from the academic side who argue that the stock market is not a zero-sum game are not always have this belief in reality but maybe they have to. Imagine if they tell the public the truth that the stock market is a zero-sum game, what the public will think? The public will think that is no more than Las Vegas. And what will happen to the economy?
Any one who believs that this is zero sum might actually have to go to a doctor to figure out wether or not they are legally retarded http://finance.yahoo.com/q/bc?s=^GSPC&t=my
LOL. You're kidding. You believe this. You have no clue why the market is always going up? By the mean of always going up is it's understandable that the market retraces back from time to time but never go back to the point where it was 100 years ago. Let me give you a story then you will understand why the market is always going up. Let say if they give you an option that you can choose 30 world best horses and you travel with them. Your objective is to go far as much as you can using your horses. You don't need to come back home if you still have energy to go far. The more distance you made the more you win, there's an excellent prize for your motivation, money and fame. Don't worry they build bridges to connect continents for you. Scenario 1: When one or few of your horses die or sick you can replace with new fresh best horses and disregard the death/sick horses, you leave them and continue your travel with always 30 best horses. Of course you can always spend sometime in the place where you enjoy the most or retrace back and stay for a while over there and then move forward. Scenario 2: You can always replace a sick or death horse with the new best horse but with a condition that you bring the death/sick horses with you. Don't worry your dead horses won't got rotten since they provide you a special chemistry to keep them fresh. In scenario 1, you will go very very far. It's unlimited, you're always "going up" or so far. But in scenario 2, at one moment you will end up by having a lot of death/sick horses and you will no longer could carry them, they become too heavy. And as a result, you can't go far. You're not always "going up." Well, it's exactly happen with the DOW (30 best stocks, refer to 30 best horses of the example above) and the S&P500. They don't keep the death or sick companies in the divisor. They are using method described in scenario 1. Now you see why the market is always going up. Do you still believe in not zero-sum?
buy the futures then if your stance is because they kick the shit companies off of the S&P500, rookies like you who believe everyone loses money will never make money, but thank you for giving me yours! And the fact that you put this much time in to trying to prove that I was wrong about the market tells me you are definitely a big time loser! Please keep giving me money in this zero sum i like taking money from zeros like you. here is another one for you but it wont show it since inception, take a 70 year off of this one and once again I win this is not zero sum it is morons like you who cant find worthwhile stocks that will atleast give you 10% per annum http://finance.yahoo.com/q/bc?s=RY&t=my
I see your point of view is very narrow you're keeping to give with example case by case. If it has an infinite cases you will get Zero. You're not seeing the big picture. Don't ever dream you can take money from me, I won't lose it to someone like you're. It's impossible to lose money to a loser like you. I can write long text when the market is closed since it requires longer time to explain for person like you.
I say thank you too. I also love the money of all the zero sum people. The more people think it is zero sum, the more I make and take. Carry on thinking that futures and stocks, or one or the other is zero sum, and I know that I will always be on the winning side. No one, upto now has asked why it is not zero sum? i.e. everyone is wondering why it is, but why it may be not. Loads of money
futures cannot be anything but zero sum all long contracts + all short contracts = 0 the equity markets, on the other hand, are NOT zero sum go back to elementary school. try arithmetic
So if it is zero sum, why is it not "not zero sum" If it is zero sum then it is not "not zero sum" which may not be true. i.e. all long contracts - all short contracts <>0 may not be exclusive because of price distortion. What happened to your winter wheat (you need to insure it), and was that spelling error around page 50 deliberately implying buying puts on MSFT, or just buying volatility calls?
Zero sum game - it is impossible, as all market and countries are developing and prices are going up, then something is changing. And of course, there exists in short term one's profit is anothers lose. But in long term it isn't like this.