PLEASE mr maverick my brain is full. Are you trying to claim the equities market is a zero sum game? If so, are you also asking me to believe all financial transactions are too? Thanks I don't want to put words in your mouth.
surfer, you are an experienced guy, haven't you seen the markets open higher or lower in all types of products with no trading in between? it happens every single day in some product. how about bonds on employment friday? i wish i could buy every price on a bullish number. 113-10 bid before the number, bam 113-30 bid immediately after. seems like something you learn the first day in the job, i'm a little surprised by the question. but, as my professors said, no question is a stupid question, only the ones that go unasked.
the question was in response to brother pekelo's querry and was asked in a socratic manner.http://lonestar.texas.net/~mseifert/crit3.html it was not a question i need an answer to. sorry for the confusion. brother surf
Since nobody really gave definitions, I guess I have to come up with some. I am just using common sense here, so correct me if I am wrong. Money: the cash amount what you can get for selling stocks or what you have to pay for buying stocks. Wealth: the POSSIBLE cash amount what you COULD get if you were able to sell your stocks at the current price. Now, to me it is obvious that the stock market is not a zero sum game (and also a Ponzi scheme, but that is a different matter), but I also believe that ALL stockholders actually can lose more money (cash that is) than what they put in altogether. I know, it sounds a bit strange that money can evaporate, but if you think about a few scenarios, it can. Any stock worths as much as stockbuyers think it does. Also a company actually has tangible assets, certain trademarks, copyrights, etc. that we can put a value on it, but several times (bubbles anyone?) the real value of a company and the percepted value are completely different. Now let's suppose some terrible news comes out about the company. Suddenly nobody wants to buy it and its tangible assets, properties and what not are worth really a small amount. So the stockprice plumets 80% and the marketcap of the company is WAY below the value of its assets. Now, wouldn't you say that most investors lost money aka cash and not just wealth? Because nobody is going to be able to sell their stocks at anything close where they got them??? Of course, you could argue that big money would step in buy the shares up and sell the assets and make a profit on them. But what if the company was based on an idea and there is no really assets to be sold? To the hell, let's play it big! Forget about the company with the bad news! Let's suppose astronomers announce that a Texas sized asteroid is going to hit planet Earth in 3 days and all lifeform except a few dozen coackroaches gonna get extinct. Maybe even mother Earth is gonna get broken into 2-3 parts... We can all agree that in 3 days ALL stocks' value is going to be zero. So in the next 3 days everybody is trying to sell (and get a good hooker a nice car or a decent meal) and except a few morons nobody is buying, because life as we know it is going to end. So in this scenario, wouldn't you guys agree that not just wealth, but also MONEY is going to be lost?? That it is possible that more money can be lost that what was paid into the system??? I rest my case....