i can cure chartists, page-116

"It is clear it isn't a negative sum."


What is abundantly clear is that financial illiteracy is the norm and all you are doing is provide further superfluous proof.


CBA is a classic example for what you have so much difficulty in understanding.

In the 16 years since the IPO it has created $80 billion in value, $60 billion in Capital Growth and $20 billion in dividends.
This has nothing to do with the stockmarket.


There are quite a few shareholders who participated in the IPO and have held on to their shares to this day.
In the case of CBA this is a substantial percentage of shareholders (I am one of them), but for the sake of this illustration lets assume that 50% of all CBA shares are owned by buy-and-hold since day dot shareholders.
The rest of the shares have been traded furiously on the market.


Obvious Facts :

1) For the buy-and-hold since the IPO shareholders the market *does not exist*.
They simply deal with CBA directly as owners.
Dividends twice a year and perhaps vote at the AGM.
The market might as well be closed.

2) The buy-and-hold types will make $40 billion in profits.
The maximum profit.

3) The other half of market-trading shareholders will make *less* than the maximum $40 billion.
For this group, the market exists.
And the market is negative sum.
It destroys value (commissions, CGT), reducing returns.

4) The market-trading half of CBA shareholders are already playing for *less* than the non-market buy-and-holders. They must now out-trade other players, first to recover ground lost to the buy-and-holders and possibly outperform them.
However, since the *total* profit for traders is *less* to start with, there will be losers.
And if the evidence presented to me in this thread is anything to go by, you rate to be in the loser camp.
The trader end of the market is the preserve of the pros and the trillion dollar hedge funs.
You will be smashed.