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> Who lost on this? Market players who didn't invest in your idea (you could call it "opportunity cost"). If the baseline strategy is "invest randomly", or "i
by nearestneighbor 17y ago
> Who lost on this?
Market players who didn't invest in your idea (you could call it "opportunity cost").
If the baseline strategy is "invest randomly", or "invest a little bit in everything", then those who deviated from it by way of not investing in your idea, lost.
It only makes sense to evaluate a market player's performance relative to some baseline strategy. I was trying to make this point elsewhere in this thread.
- sorbits 17y agoFrom http://en.wikipedia.org/wiki/Zero_sum_game http://en.wikipedia.org/wiki/Zero_sum_game zero-sum describes a situation in which a participant's gain or loss is exactly balanced by the losses or gains of the other participant(s)
- nearestneighbor 17y agoAnd how do you define "loss" and "gains" for market players? PS: Your definition appears to be "you lost iff you left with less money than when you came in". OTOH, my definition is "you lost iff you made less money than if you would have if you'd invested it in an index fund".