Short Term Trading Member Forum

[pegwatcher]

re: zero-sum. my long held belief is that any "wealth effect" from equity trading/appreciation over and above it's true intrinsic value is zero-sum, because I truly believe the old axiom that in the short term the market is a voting machine, in the long term it is a weighing machine.

Therefore, if MSFT proves out to be truly worth exactly $20 a share at the time of your sale, your $20,000 ultimately will come from the poor sucker left holding the bag.

If the stock later proves to have been worth $24 then the $20k comes from MSFT's operations and it is not zero-sum but true wealth creation.