No, it's not. Person A buys stock 1, stock one goes from $10 to $15. Person A makes $5. Person B buys it at $15 and then it pays a $1 dividend, person B makes $1. It's not zero sum, everyone can win.
No, it's not. Person A buys stock 1, stock one goes from $10 to $15. Person A makes $5. Person B buys it at $15 and then it pays a $1 dividend, person B makes $1. It's not zero sum, everyone can win.
If we're talking trading, it means a short timeframe, let's say over a few days. The stock market doesn't really grow over a few days, it's basically zero sum. So every gain you make is balanced by someone else's loss. The issue is both the sellers and buyers are paying transaction costs and taxes, which makes it actually negative sum.
If person A waited a few days and the stock shot up, then it's basically gambling since no stock has 50% expected returns in a few days. These are the "random" fluctuations in the market. Another person made a similar bet and their stock went to $5 instead, losing money. Overall it's negative sum.
If person A waited a few years instead and their stock went up to $15, sure then it's different. But it's stock investing, not trading. They made a profit because they held stocks, not traded them. You also get dividends for holding stocks, not trading them.
You are only ever expected to make money from trading stocks since you kind of also have to hold the stocks for a bit. Stock traders accidentally invest and that's how they make any money at all compared to pure gamblers.
Note that I am talking about the vast majority of stock traders here but not the financial experts or algo trading firms that try to find inefficiencies and exploit them. They can actually help with price discovery and profit by making the markets more efficient. But even they're only making calculated bets at best much like good poker players. Most regular people have no chance.
That only applies for industries that are growing. And most of the “gambling” happens in options markets which are perfectly zero sum before fees.
You changed the goal posts, the thread started with stock. Derivatives are completely different.
Shrinking industries can still generate profit, and can still give out dividends.