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HURRICANE!!! · 03-06-2020, 06:50 PM

(03-06-2020, 03:03 PM)The Real Marty Wrote:
(03-06-2020, 12:45 PM)HURRICANE!!! Wrote: I found this article rather fascinating as I got to thinking where do your losses go when the stock market plunges. The short answer is the money disappears. Yes, it pretty much evaporates into thin air. Unlike sports betting, where there is a winner and loser, when a stock goes down from $100 per share to $95 per share, there's really nobody on the other end receiving that specific $5 that the investor has lost. Sure, people ultimately benefit by buying low but I'm speaking of each single transaction. Conversely speaking, the same goes for upticks in a particular stock.

https://www.investopedia.com/articles/ba...060603.asp

That's an interesting question. Think of it this way: you have $5, and your friend has an apple. You think the Apple is worth $4, so you buy the apple for $4. How much money is there? $5. You have $1 and your friend has $4. Then, the value of the apple falls from $4 to $2. How much money is there? Still $5. What if your friend buys the apple back for $2? How much money is there? Still $5. You now have $3, and your friend has $2. The apple "lost value," but where did the money go? It didn't disappear. It's still the same. $5.

When the stock market plunges, money doesn't disappear. Value disappears. But the money stays the same.

So what I object to about that article is that it fails to distinguish between value and money. Those are two different things.

Yes, ultimately it's equity (value) versus currency but it feels much different than having a home that lost value because stocks are much more liquid in nature knowing you can cash in (liquidated) at any given time M-F between 9:30am and 4:00pm.

Given the concept of so many investors losing so much money, I really don't see a V shaped rebound (to get to 29,000 in a month or two) but rather a gradual upward trend beginning in Q2 (assuming we get carona under control) that may take the next 6-9 months to get to 29,000. some people just wont have the wealth to re-invest.