No. In my example, the price of the stock went from 1000 to 500 on no trading, due to bad news. There is absolutely no reason this cannot happen, and indeed sometimes it does.MediumTex wrote:Indirectly, yes.Libertarian666 wrote:Let's say you have a share of stock that is bid at 1000.MediumTex wrote: The PP is having a good 2016 so far. Historically, when the PP has had a few soft years it will have a couple of years with above average returns.
I don't know if 2016 will be that year, but the way the PP has behaved historically suggests that it is due for a good year.
Gold is also an asset that seems due for some speculative interest with money now fleeing the stock market, the bond market offering limited potential speculative gains, and the rest of the commodity sector suffering from soft worldwide demand.
The money has to go somewhere. Contrary to what Maria Bartiromo likes to tell us, there is no such thing as "money on the sidelines." There are only a series of fields adjacent to one another, and if money leaves one field, it necessarily enters another field.
Now suppose there is bad news about the stock and it is now bid at 500.
Where did the "other 500 points" go? Does something else have to go up in price to compensate for the "lost 500 points"?
The 500 decline in value is now in money Heaven. It's gone.
If you decide to sell for the new price of 500 that money has to go somewhere.
However, the only reason that the 1000 stock is now 500 is that a bunch of people have been selling it (more than usual or it wouldn't have lost half its value). The money they are taking out of the stock market has to be going somewhere else.
I'm just talking about where money goes when assets are liquidated, not where the the difference between the old price and the new price goes when an asset declines in value, though the decline in value of individual assets is one of the effects of money leaving the overall market.
Sound right?
So if you want to say that the money went to "money heaven", go ahead.
But given how skeptical you are on the "Figuring out Religion" thread, I would imagine you would prefer the more direct statement that it never existed in the first place.