Semi Equipment Analysis Message Board

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Technology Stocks : Semi Equipment Analysis

SOXX 312.76

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4:00 PM EST

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To: Sarmad Y. Hermiz who wrote (11831)	9/26/2003 11:33:09 AM
From: Sam Citron	of 95536

Sarmad, What you say may have some validity for the commodities market where there is a short position for every long position outstanding so it is a zero sum game and for equity markets in the normal day to day activity. In the stock market there are relatively few short positions outstanding. When the market goes up it's a positive sum game. When it goes down, it's a negative sum game. It causes the money supply to expand and contract independently of FRB action. Don't forget that the essential function of the capital market is for companies to have an alternative source of raising capital other than through debt. It's role as a casino is only a sideshow to offer liquidity to speculators who allocate capital between one sector and another. When the market gets to certain levels companies come forward to issue new shares to the public in initial and secondary offerings. This is when the money really leaves the sidelines. Your point is well taken. Sam

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