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Old 10-04-2005, 03:56 PM
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Default Re: Is the stock market +EV?

Hi Squiffy, in a closed environment, can you ever have a non-zero sum game over the long term? To take your coconuts analogy, it seems that first you are correcting inefficiecies (amount of labor,technology) in the market for coconuts, and then you're expanding out of the original village (attacking other villagers). Eventually however you hit a limit, where it becomes a zero sum game because each additional increase in production is associated with a decrease in some other resource.

It seems like the real increase in wealth comes from expansion, otherwise the market would devolve into a zero sum poker game, with technology only increasing the magnitude of the swings (think multitabling)
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