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#1
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Why is the stock market a positive sum game?
not sure if this is the right forum but w/e.
Can someone explain to me how the stock market and the trading of stocks benefits all of those are involved? From the little knowledge I have of it, it would seem to be a zero sum game...can someone clear this up for me? |
#2
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Re: Why is the stock market a positive sum game?
the underlying businesses are generating profits on net. those profits ultimately go to the shareholders.
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#3
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Re: Why is the stock market a positive sum game?
because more people are born
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#4
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Re: Why is the stock market a positive sum game?
Markets CREATE wealth because share prices rise and that rise in price is objectively based.
IE: If a public company has a float of 100m shares and today the market values it at $1 but tomorrow the market values it at $2 100 million dollars has been CREATED |
#5
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Re: Why is the stock market a positive sum game?
True... but the intrinsic reason is that the company itself is creating additional value in the form of products that translate to earnings, which increase the intrinsic value of the company. This is then hopefully reflected in the share price.
As long as companies continue to make money and the market goes up, the market will be long term positive sum. |
#6
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Re: Why is the stock market a positive sum game?
Population increases + productivity increases + inflation = average long term market return
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#7
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Re: Why is the stock market a positive sum game?
If you had bot 1000 sh of MO or XOM in 1950, what was your purchase price?
What is your accumulated dividends since then? And splits? |
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