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I wasn't suggesting that trading is the same as a game played for amusement.
Here game is defined as in game theory. A zero sum game is a competitive
activity between two or more participants where the gains equal the losses.
Something like a friendly game of poker, the amount of winnings equals the
amount of losses.
A negative sum game is one where there are fees or charges to the
participants so that the gains are: (equal to the losses plus the fees). A
pari-mutuel track is a race track where the betting payoffs are less than
the odds because there are betting fees and taxes on each bet.
In games theory there is also a positive sum game where the payoffs are more
than the losses. I don't know enough about games theory to discuss this much
further.
Lionel Issen
lissen@xxxxxxxxxxxxxx
----- Original Message -----
From: "J.W.E. Roberts" <jan.roberts@xxxxxxxxxxxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Sent: Tuesday, October 23, 2001 3:33 PM
Subject: Re: Newbes, mechanical systems, expectancy, etc.
> Hi Lionel,
> I disagree with your disagreeing ;-)
> Although I don't know what a "pari mutual track" is, I suspect you're
> talking about gambling, and there the bank truly always comes out ahead -
> so nix zero sum game allright. Insofar as we're talking about derivatives,
> and I mean all variants, right again: You makes your choice and you places
> your bets and we takes you money...
> However, when buying stocks I definitely do not partake in any kind of
game
> but I acquire part-ownership of a real firm doing real business in the
real
> world. Of course I hope and trust that it will grow and prosper, thereby
> adding to the value of my stock in it. Goverments all over the world
> clearly recognize this fact by levying VALUE ADDED Taxes. Brokerage fees
in
> this context are the price I pay for a service: the actual acquisition and
> transfer to my holdings of the stocks I wish to buy.
> In short I just wanted to say that buying stocks, i.e. investing, is not
> part of any game, zero or otherwise summed, but partaking in the economy
of
> my country and/or the world, and thereby helping it (and myself of course)
> to thrive just that little bit more.
> Kind regards & Happy Trading,
> Jan Willem Roberts
>
>
>
> At 09:12 22.10.2001 -0500, you wrote:
> >Erich:
> >Excellent post. Sometimes we have to be reminded of the obvious and not
so
> >obvious.
> >
> >I disagree on one point. The stock market is not a zero sum game, like
> >betting at the pari mutual track, it is a negative sum game. The
brokerage
> >fees are the house charges, less money goes out (to the winners) than
came
> >in (from the losers).
> >Lionel Issen
> >lissen@xxxxxxxxxxxxxx
> >----- Original Message -----
> >From: "Erich Kohlhofer" <KohlhoEG@xxxxxxxxxxxx>
> >To: <metastock@xxxxxxxxxxxxx>
> >Sent: Monday, October 22, 2001 2:12 AM
> >Subject: Newbes, mechanical systems, expectancy, etc.
>
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