I believe in opportunity cost. eg. I buy at $1, sell at $2... then the stock goes to $3. I made $1 profit, but I lost $1 in opportunity. If you don't believe in opportunity cost then it's not zero sum.
like I said, it's all how you frame it... once you trade for a decade or two, you realise that your opportunity losses are the most significant losses. If I buy something at $10 and it goes to $15 and sell, I made 50% profit... if the stock continues to rise to $50. IMO, that is my biggest loss of the year. The fact is I made $5 and lost $35.
I agree trend_guy. I would rather take an actual loss than close out a long position the day before the stock doubles. Sounds rediculous I know.
trend guy soooo....i buy 1 million shares of google at 100 bucks a piece and sell them at 101 dollars and make 1 million profit........i am actually -249 million cause i didnt sell them at 350 dollars????????????? please stop posting cause your an idiot oportunity cost has 0 do to with zero sum
Anyone who understands this concept IMO has experience and makes money. The the only way to understand this is to sell at $15, make 50% profit and see the stock go to $50. If you think you didn't lose anything for selling at $15 you probably shouldn't be trading because you just don't get it.
In the options and futures market it is a zero sum game (include comm. and expense and time value of money it's a neg sum game) But going long on STOCK equity doesn't mean there is always someone on the short for that stock at a 1 to 1 ratio...So in this Market it is not a zero sum game. Longs all win and lose together on the percieved value of the paper you hold.. I look at the Market as a "Ponze Sceme", Ponze said he could double your money in a year. one man believed him..Ponze then spent that year looking for 2 new people to believe him..he found them, took their money and at the end of the first year.. the first man got twice the amount he gave Ponze...Word broke out around town that Ponze could double your money and everyone before you new it was giving Ponze money and for years he kept doubling the early investors money...A PYRAMID SHEME...Ponze had so much money that he left town and lived a luxurious life.. Moral of the story lets hope your not the man with the paper when the buyers disappear... GO TO Forums--trading for a living--Journal--want to share For a look at a Portfolio up 20% in 2006...with over 175 positions.