Today I saw a price chart of stock. That company had gone public for 20+ years. The interesting thing that I notice is going to sound completely baffling and it is just my hypothesis.
Note: I am not a Financial Advisor, No Debate is welcomed.
Over a course of 20 years, If you sum up all the ups and downs in the chart that is nearly zero.
That is when it struck me that. No matter you go short or long on a stock. Over the long run, you are going to make approximately a similar profit.
And I tried to connect that thought with the recession humans have faced in history.
And the interesting thing I found is that there are some traders that lose little money every day, but get a huge profit during such uncertainty. And that profit not only covers up their losses but returns much more than expected.
Okay now, this may contradict my idea of perfectly balanced. Because I am saying ‘they gain huge profit that not only covers their losses but also makes more than expected’. It is because they close the trade immediately, they accumulate certain profit. (If they waited too long, then they will also go to neutral)
I argue that if it is measured in the time frame of Infinity. Then the sum will equal zero.
Profits and Losses are Perfectly Balanced: As All Things should be.