Winning opportunities and frictional costs

Ideally, the best business is to collect rent and interest. Except for those so-called models, chains, innovations, etc., they are all scum. After all, the financial industry is the mother of all industries and the existence of the pyramid. Although there are risks, it can be said that they belong to the rentier class.

In the currency circle, stocks, and futures industries, there are always many bigwigs or big Vs. Watching them share this standard and earn money in that band, and even buy and sell coins, they still make money. I think they are the great gods we worship. As the saying goes, the eternal Make money.

But is this really the case?

When I was 19 years old, I went to the casino to play. Because I participated in it, I could see more clearly how everyone lost money. The gamblers are very shrewd. They all think of empty gloves and white wolves. They bring a few thousand yuan and tens of thousands more. If they win, they will leave, and if they lose, they will borrow money to repay their money. This is gambling based on luck.

But they are not a small account. Although they only draw 50,100 yuan per game, they cannot bear to draw every hand, so all the gamblers lose money at the end of each game. But the gambling seems to be very profitable, and I can't help but continue to play next time. This principle is easy to understand. Gamblers care about winning or losing, and casinos are sure to win. Because of the margins, no matter how much you gamble, as long as you keep playing, the casino will win in the end.

In the field of trading, this is the so-called frictional cost. Commissions are charged for buying and selling. As long as high-frequency trading is required, the cost of paying is extremely high. However, in the eyes of many investors, this money does not care because everyone wants profit and profit.

Because gambling and speculation amplify people's desires, some frictional costs are ignored. The currency exchange is the top of the food chain. All project parties, investors, and institutions create profits for it. Moreover, he can also rely on industry status, capital advantages, and three-party connection resources to make steady profits.

There is a widely circulated case in the financial and business education classroom, which is the story of selling water to people who are digging for gold. The same is true for our investment. Everyone comes to the market thinking about making a lot of money, that is, rushing for gold, and the exchange is to provide us with Water, making a fortune is a dream, but drinking water is just a need.

In the end, I don’t know if the gold diggers made a fortune, but the water sellers must have made a fortune.