where does the money go?

Discussion in 'Economics' started by chuckybrown70, Mar 6, 2009.

  1. "It's not a question of enough, pal. It's a Zero Sum game - somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred - from one perception to another. Like magic."
     
    #11     Mar 6, 2009
  2. Sounds like a winner!

    [​IMG]
     
    #12     Mar 6, 2009
  3. Not correct in the strictest sense. For every long, the company is outright short its shares. It collected the money at its offerings in exchange for the liability to its shareholder to split up profits / part of ownership with voting rights.

    So when a stock goes through the roof, the company has foregone the gain in share price.

    Foregone gains are a loss that result from a decision made. A transfer of wealth...

    Stock market wealth is not strict zero sum, but a result of capital flows from other markets...
     
    #13     Mar 6, 2009
  4. btud

    btud

    The gain is proportional with the amount of cash you have. So, to answer your question, no. People with a lot of $$ gain the most, and those with little, the least. The rich still win in the end :cool:

    Of course those people with a lot of money, and no stocks love the fact that the market is crashing. It creates oportunities not seen in decades.
     
    #14     Mar 7, 2009