The equity markets enjoyed a nice, big rally Tuesday, and a smaller one today, after some rather unpleasant losses lately. In my world of lost sleep, lost luggage and lost causes, I've been trying to put financial losses into some kind of perspective. Even after yesterday's rally, we've still lost about 7.5% from the March high of 1422 on the S&P, and the Euro has lost about 7.5% of its value against the dollar . Meanwhile, JPMorgan Chase lost $17.5 billion in some sketchy trading activity a few weeks ago, and movie-going on Memorial Day weekend lost about 31% from last year. Was this because of mega-flop John Carter? It lost about $84 million.
And let's not forget our "friend" Mark Zuckerberg, who seems to have lost about $5 billion in the last couple of weeks (give or take a mil). Compare that to Greece's largest lender, National Bank, which reported a $666 million loss in the first quarter. Maybe Zuckerberg can bail them out! He could at least "like" their page, and change his privacy settings to allow targeted ads using pictures of him vacationing in Greece.
So where did it all go? The lost money ---- did it all just evaporate and cease to exist? Or did it just go somewhere else? Is it all a Zero-Sum game? Ya know, a "my loss is proportionate to your gain" type of thing. Like if the job went to to that guy over there, it didn't go to you, so his gain is the same size as your loss. For every winner there's a loser, whose despair is equal to the winner's joy. If it's a zero sum game, losses don't evaporate, they just go to the guy on the other side of the deal --- like the person who you bought your Facebook shares from. And the winners and losers keep shifting. Who won in that deal? You, who got shares of a supposedly hot IPO, or the other guy, who got your money? The person you sold your FB shares to at $35 may have thought he was the winner, because it was below what you paid at the IPO, but when he resold those shares to the next person at $28 he didn't feel like such a winner anymore. The person who bought them at $28 may end up a big winner, or an even bigger loser, when there's no one who believes FB will be able to make any money off ads no one seems to be clicking (and aren't even visible on my iPhone FB app).
So who really wins when FB goes down from $45 to $25 a share? Short sellers? Brokerage houses handling the trades? Anyone else? Bueller?
Is John Carter's loss the Avenger's gain? For it to be a zero sum game, the Avengers would have to have made $84 million, and so far it's made $1.3 billion worldwide, so that's not a zero sum.
The Euro's loss is your gain, if, say, you're planning a trip to Paris this summer. You can get a few more croissants for your buck. One analyst was just saying that all the trouble in Greece and elsewhere will only strengthen American banks, which will get the business that European institutions lose.
And let's face it, the only thing anyone ever really wants to lose it weight. What if that were a zero-sum game? What if you could lose weight and someone else would gain it? I see potential for a great reality TV show there. "The Biggest Winner". People who have really fast metabolisms and can't gain weight could put on someone else's cast off pounds. But that wouldn't be a zero-sum, it would be a win-win. So maybe instead the person who took your job and your money would have to also take your fat.
Just brainstorming.
No comments:
Post a Comment