Is the stock market +EV?

wildwood · #1 09-30-2005, 10:42 PM

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Is the stock market +EV? I mean, if we take every single action and add them together, would that amount be greater each year? And if it is, how can that be? Isnt that supposed to be that when someone makes money another one loses money?

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Is poker +EV? Depends on you. Same with the market.

Stock market money comes from consumers as well as other market players. I met a guy who bought 100 shares of Home Depot and held it through 9 stock splits and is worth over 15 million dollars now. That money came from people buying hammers and saws, etc. in Home Depot.

Futures is zero-sum. Money only comes from other traders after subtracting commissions.

Sniper · #2 10-01-2005, 09:45 AM

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Is poker +EV? Depends on you. Same with the market.

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No, they are not the same... Poker is -EV overall, because the rake is substantial. Yes a good player can beat it, but he's still working in a significant -EV environment. In poker, to win you must take money from other participants, and beat the rake.

In the market it is possible for all player to win, because your wins do not result from someone else losing.

wildwood · #3 10-01-2005, 12:32 PM

Sniper,
You totally misunderstand what I'm saying. Whether poker or the market is +ev or -ev depends on the INDIVIDUAL. (That's what "depends on you" means)
Also the possibility that all market players can win is theoretical nonsense that does not apply to the real world. Reality is most market players do not win.

Sniper · #4 10-02-2005, 09:49 AM

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You totally misunderstand what I'm saying. Whether poker or the market is +ev or -ev depends on the INDIVIDUAL. (That's what "depends on you" means)

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While an individuals skills impact their own results, their skills do not change the characteristics of the game.

Poker is a -EV game. The Stock Market is a +EV game.

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Also the possibility that all market players can win is theoretical nonsense that does not apply to the real world. Reality is most market players do not win.

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You are wrong, in the long run, most participants are winners in the stock market!