Lesson 20: Is it humanly
possible...
Is it humanly possible for a hypothetical
investor like Mrs. B to make money speculating in commodity
futures in the year 2001?
Mrs. B does
not exist. She is 100% hypothetical. She has no stock market
account and no commodity account and no options account. She is
created solely for the purpose of illustration much as any
character in any novel is created in order to let a story unfold.
We first encountered our hypothetical Mrs. "B" in lesson eighteen
and lesson nineteen where she was portrayed as a conservative
lady, age about 45, who had invested in the stock market, futures
and options contracts for years. In lesson nineteen, we
considered her hypothetical purchases of corporation 101 shares
in the years between 1990 and 2000. We are going to take a look
at her hypothetical commodity trades in the year 2001. There are
some ground rules that you should accept before we proceed and
you will be given a test shortly to determine whether you
understand these ground rules and accept them.
Rule
Number 1. Mrs. B does not exist.
Rule Number 2. Mrs. B does not have a commodity
account.
Rule Number 3. Mrs. B does not have an options
account.
Rule Number 4. Mrs. B does not have an equity
account.
Rule Number 5. Mrs. B is going to try to trade
commodity futures in the year 2001.
Rule Number 6. In reality, of course, this will not
be happening, but we will pretend that it is happening.
Rule Number 7. If Mrs. B seems to suffer any
losses, she will not in reality suffer any losses because she has
no account in which she has invested any money.
Rule Number 8. If Mrs. B seems to gain any profits,
she will not in reality gain any profits because she has no
account in which she has invested any money.
Rule Number 9. In these examples, even though from
time to time it will appear that Mrs. B is real, you should
always refer back to these rules to refresh your memory that Mrs.
B does not exist. Her trading is hypothetical, her account is
hypothetical, her money is hypothetical, and she is
hypothetical.
Rule Number 10. If you understand all this,
click here and
proceed.