Is stock investing a zero-sum game?

This question has puzzled me for a long period of time since I started my journey on learning about investing. Different people hold different views to this question. Some say stock investing is a zero-sum game while others say that it is not. Is stock investing a zero-sum game?

The idea of zero-sum game implies that in every stock investment transaction, one party must benefit at the expense of another party who is making a loss. It seems that during every transaction of a stock in the stock exchange, the proponents in support of investing as a zero-sum game hold the view that one party must always benefit from the transaction from another party who is making a loss. 

For example, buyer buys a stock at a particular price from a seller who sells at a loss to him. This seems true during a bear market when a seller might be selling a stock at a loss due to a down-trending market to a buyer who buys the stock at a cheaper price which later rises in price resulting in a profit for the buyer. This also seems true when a seller sells a stock at profit at a particular price to a buyer after which the stock price goes down resulting in a loss for the buyer. 

However, do stock prices always behave in a zero-sum game fashion? Is it always necessarily true that one party must make a profit from a transaction at the expense of another party who is making a loss? 

Through my own experience with investing so far, I noticed that any stock investment transaction on the stock exchange may not necessarily follow a zero-sum game fashion. For instance, when I sold off a stock at a particular stock price making a profit, the buyer of my stock did not make a loss thereafter as the stock price continued its climb further. In this case, both parties made profits on their transactions. In another case, when I sold off a stock at a loss, the buyer of my stock did not make a profit as the stock price continued to decline further. In this case, both me the seller and the buyer made losses together on our transactions.

Thus, it is not always in a stock transaction that one party will make a profit at the expense of another party making a loss. This is the randomness of the stock market as described by Benjamin Graham, the father of value investing that in the short-term, the stock market is a voting machine, but in the long term, it is a weighing machine.

In the long term, stocks belonging to businesses with good fundamentals may grow their value over time rewarding their investors with appreciating stock price. For example, one cannot imagine a small company that has grown over time to become a large enterprise generating larger amount of revenue, income and cash flow to be still trading at the same share price when it was once in its infancy stage of growth. Unless this company keeps issuing more outstanding shares enlarging its equity at a faster rate than the growth of its earnings to dilute its earnings per share. Then, we might see a stock price that has not grown over a long period of time as the earnings per share remains the same due to dilution effects of more shares issued over time.

Thus, the company that can steadily grow its earnings per share over time, while growing and managing well its other tangible and intangible fundamentals such as revenue, income, cash flow, margins, branding, market share, corporate governance, debt loads, debt servicing, working capital need, etc. will generate appreciating stock value over time. This is why the stock market is a weighing machine over time as time will tell the difference between a good company and a lousy one. 

An investor can invest in a company at its early stage of growth and exit from the company by selling off his shares at a profit to another investor after the company has grown into a medium size enterprise. The latter investor can also benefit by staying invested with the same company which grows into a large enterprise similarly seeing the share price of the company continue its appreciation over time and making also a profit on his investments. Both investors, the earlier and latter one derive benefits by staying invested with the company that grows in value. No one benefits at the expense of the other as both made their profits on their investments. 

If one is a good value investor, there is no concern over whether stock investing is a zero-sum game or not. This is because no matter which period of time he has bought his shares (assuming he always tries his best to buy at lower than his estimated intrinsic value per share of a good company securing a margin of safety), he will be rewarded with an appreciating share price over a period of time. Thus, stock investing will never be a zero-sum game for any investor as no matter at which stage of growth in the company, as long as an investor rides on the growth, he will be seeing the share price of his invested company appreciate over time as the company grows. This is on the assumption that he has invested in a good company at a reasonable share price that grows its fundamentals steadily over a long period of time. 

Is stock investing a zero-sum game? By the looks of it, it is not. A company can grow over time and an investor who has invested in a good company that grows in value over time will see his shares in the company appreciate over time. Thus, stock investing is not a zero-sum game as it will reward any patient and astute investor who rides along the growth of a good company, seeing his invested shares grow in their share price over time. This is only so true of a company that grows in value instead of destroying value for its shareholders over time.

Stock investing is not a zero-sum game. 

Any investor can derive value from a good company by participating at different points of its growth.