THE FLOAT ROCKERS

[amiencc]

This assumes that the stock goes up forever. If you buy at .20, it's because you thought it would go up. It does, and you sell at .30 because you feel it is about done. I buy your shares at .30 because I don't believe it is done. I'm wrong. It goes to .32 and then drops to .25, never to recover. I lost by buying your shares, and you won.

Of course, a different scenario could play out and I buy your shares at .30 to see them increase in value to .50. I sell these shares to someone else, which means you and I both won. But then the person who bought the shares from me could see the value drop from .50 to .25, and that's when we get the bagholder. They lost so we could win. It may not happen for a few more transactions, perhaps quite a few transactions, but there will eventually be a bagholder on the shares we buy and sell.

That's where my thought process was :)