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.
