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zero sum game

Stocks are a zero-sum game

July 15, 2009

I firmly hold that all financial contracts are zero-sum games. Recently, however, I have heard many arguments premised on the idea that the stock market is positive sum because economic growth creates wealth, which is reflected in universally rising stock prices. But in this scenario, you purchase $1 of stock on Day 1. On Day […]

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Yet more reverse convertibles: positive sum games?

June 19, 2009

Did Felix Salmon really just write this in defense of his reverse convertibles stance?? For one thing, stocks generally go up over time: they’re a positive-sum game. ... Retail investors, as a rule, have no business buying instruments with limited upside but 100% downside — I’d even include individual bonds in that, despite the fact that […]

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