I woke up this morning with a strange thought in my head. I’d gone to bed thinking about football because it is Madden Season and by extension Youth Football Season is right around the corner. So, I found myself thinking about video game football and real football and really working both down to a basic equation. If you think about it, football is ultimately the same type of equation as the stock market. Each player represents a set of data. That data is used in relation to other data to reach a conclusion, which is a 1 (win) a zero (loss) or less common an error (tie). We pay these players so much because they are uniquely qualified to generate the data needed to push forward the equation (which we are balancing with another equation represented by the opposing team).
Video game simulations work this equation in their own minds compiling the data set used to represent each player in order to complete the balancing equation and produce the one or zero (depending on what side you are on) or to actually balance the equation–which is never really the goal.
That brings me to the stock market. Each stock represents a balancing equation. You have an output of 1 (stock gains) 0 (stock losses) or the equation balances (no movement)–which is never really the goal. In sum, both are zero-sum games in which millions of people are playing at various levels, and ultimately the results of the game shape our understanding of the data, the world around that data, and even ourselves.