The quote you referenced talks about money not wealth. They are not interchangable. In fact this quote actually refutes your position since it says that wealth does change with stock market price changes.Quote from Maverick74:
For you Surf, anything.
http://wfhummel.cnchost.com/misconceptions.html
It took me all of 2 seconds to pull this link up on Google. Here is a brief excerpt:
"Where does all the money go when stock prices plummet?
This question mistakes the monetary value of stocks for money itself. Stock prices simply reflect the current market value of the shares. At the end of the day, buyers own more shares and less money, while sellers own fewer shares and more money. Their aggregate financial wealth may be higher or lower, but the total amount of money they own remains unchanged."
Gee wiz, where have I heard this on this thread before? Hmmmm. Let me think, oh yeah, it was me! LOL.
Why isn't anyone discussing what is going on?
- Thread starter NTB
- Start date
No, net wealth does not change. Read it again. That is the net wealth of both parties, not one party.
Quote from winter:
"Their aggregate financial wealth may be higher or lower, but the total amount of money they own remains unchanged."
Correct. Aggregate financial wealth can be higher or lower as a function of debt and credit markets. Read your own links for the answers. Once you remove debt from the equation they net out to zero.
I don't think this is true. What happens when a stock gaps down big and never looks back? Doesn't the total amount of money just got LESS between yesterday's close and today's open????
By the way the site itself has some serious missconceptions....
The stockmarket is not a zero sum game because (beside commisions) a relative small amount of stocks changing hands can determine the value of the rest...
No, everyone that bought at higher prices paid that money to the sellers. Those that were long, lost their money to those that sold. If these don't net out to zero, somebody cheated somebody somewhere.