Who said you had to liquidate it with a loss?
There is no difference. Like I said…“Both parties expect that what they are getting from the trade will bring them more satisfaction than what they are giving up…otherwise the trade would not take place.”
The double thank you takes place when the trade takes place. If stocks were traded personally (like other goods), you would get the double thank you. Again, both parties are expecting to win. If it’s a bet, then yes, one party has to lose…but at the moment the trade takes place, both parties are getting something they want more than what they are giving up.
Just because two parties take opposite sides of a bet, and one party wins where another loses, it doesn’t necessarily mean “one guy knew better than the other.” When someone flips a fair coin and you call heads where someone else calls tails, and it lands heads…does that mean you “knew better”? You “knew” something the other guy didn’t? That’s why you won?
And what’s more, stock trading is not necessarily “betting”. And even when it is, it’s not “betting” in the traditional sense. In normal gambling, you have a defined timeframe and a pot of available funds that one party wins at a designated point in time. In a market (yes, even a stock market) different people have different goals and different time horizons. Just because I buy a stock from you and it goes down over the next month doesn’t mean I’ve lost anything. For one thing, I could have bought that stock specifically and solely for the dividend…with no intention of ever selling (something Warren Buffett is recommends). So just because the price went down, that doesn’t mean I’ve lost a damn thing.
But even if I was speculating (i.e. buying in hopes of seeing some appreciation and then selling for a capital gain), you still have no idea what my time horizon is. I could be planning to sit on that stock for a 6 months, or a year or more.
I buy a stock from you and a month later it’s down 3%. You didn’t think it was going to go down necessarily. In fact, let’s say you thought it was going to go up…you just needed some cash at that point in time. Three months later it’s up 31%. Who won? Who lost? Again, your view of this is far too narrow.
Yes, superior knowledge of a market can give insight that allows for more wise decision-making, but (1) there is a myriad of ways to define “winning” in market investing…which means, again, just like in the grocery transaction, both parties can still benefit, and (2) even in a gambling situation in which one party wins where another party loses (like betting on a coin flip) it doesn’t always follow that the guy who wins won because “he knew better” than the other.
And finally, if you really insist on maintaining that speculative trading is “betting” just the same, and that the “winner” “knew more” than the “loser”, how the hell do you explain the fact that in study after study, monkeys outperform fund managers?