With the exception of the founders of listed companies who created shares to sell, there are more losers than winners in the stock market. A director of one of the financial institutions told me that among all the branches of the bank, the stock broking branch is gradually losing business because there are more losers than winners. The broking branch makes more money from the small investors because they trade far more often than big longer term investors. As a result, more small traders retire than new ones are being born. That is why the broking branch earns less profit. You can see the number of people watching the screen in the trading hall is reducing gradually. There is no statistics to show the number of investors watching the market from their own computers.
In the stock market the total amount of money lost by the losers less broking charges is equal the amount of money won by the winners. The questions are why the losers lose money and why the winners continue to make money?
The reasons why the losers lose money are:
They do not know the fundamentals of selecting stocks.
They have no holding power to keep their shares for longer period and when the prices of their holdings drop a little, they have to sell to avoid margin call.
They trade too often. Even if they can pick good shares but if they trade often, they would lose money in paying for the transaction cost.
They are too egoistic. When they pick a winner, they would sell it quickly so that they could boast to their friends or write in i3investor.com to blow their own trumpets.
The reasons why winners make money?
They know the fundamentals of selecting stocks.
They can pick more winning stocks than losing stocks.
They can buy more shares when the price of their selected share drops for no valid reasons from the losers.
Due to their constant winning, they are richer and have longer holding power so that they can sell their holdings at higher prices to make more money.
Conclusion: The rich investors are taking money from the losers. As a result, the old losers are gradually disappearing and new suckers are being born every day.