I’ll write the cute answer (for other’s benefits, since I expect you’ve thought of it).
Mr. Example2 decided to duck out of the market this year and sells his 1 share of SPY for $100. He keeps the cash at his brokerage, and gets 1% interest. Fleeing to cash turned out to be a bad deal for his portfolio—Mr. Example2 “lost”.
What did Mr. Examples’s brokerage do with his $100 in cash? Why, they lent it to Mr. Example1! Mr. Example1 borrowed $100 to buy a share of SPY (from Mr. Example1). The broker charged Mr. Example1 1% interest, which they pass on to Mr. Example2. This leverage turned out to be a great idea for Mr. Example1′s portfolio—Mr. Example1 “won”.
So the cute answer to you questions is “the guy from the other example”.
(But I don’t think this the root of the issue, so let’s move to a different thread leaf)
I’ll write the cute answer (for other’s benefits, since I expect you’ve thought of it).
Mr. Example2 decided to duck out of the market this year and sells his 1 share of SPY for $100. He keeps the cash at his brokerage, and gets 1% interest. Fleeing to cash turned out to be a bad deal for his portfolio—Mr. Example2 “lost”.
What did Mr. Examples’s brokerage do with his $100 in cash? Why, they lent it to Mr. Example1! Mr. Example1 borrowed $100 to buy a share of SPY (from Mr. Example1). The broker charged Mr. Example1 1% interest, which they pass on to Mr. Example2. This leverage turned out to be a great idea for Mr. Example1′s portfolio—Mr. Example1 “won”.
So the cute answer to you questions is “the guy from the other example”.
(But I don’t think this the root of the issue, so let’s move to a different thread leaf)