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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 75.19-0.1%Jan 16 3:59 PM EST
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To: Stock Farmer who wrote (47742)2/1/2001 4:19:49 PM
From: The Phoenix  Read Replies (2) of 77400
 
John,

I think there are items in this world that have value. Some place a higher value on it than perhaps you or I would.

Example: If I had a rock that I found and someone was willing to pay me say $10 for it I might take it... that would represent a $10 expense for the person buying it and a gain for me.... the person that purchased the rock still has the asset - the rock - valued at $10 - they have lost nothing. So, there is a cash expense and an asset gain - the balance sheet is intact. Going forward that person may find others that are willing to pay more... and thus he makes money on the rock (sale of goods shown on the income statement) and thus removes the asset from "inventory". Those buying the rock have information about the rock, where it came from, etc in order to make a decision as to whether it's of value to them... and whether they're willing to pay more for it. In each transaction there is a gain and an expense. The underlying assumption is that the rock continues to gain in value over time - whether it be in line with inflation, faster than inflation, or slower than inflation. In some cases people may be disappointed in that the rock is not performing well as an investment and then they sell the asset for less then they purchased it - in which case they take a loss.

The assumption you have made is that for someone to gain that others have to lose. The only thing they may lose is opportunity costs - unless of course they are selling their shares at a loss. Again, you are too focused on options and an assumed effect on valuations rather than the asset itself - the stock.

As for your comment There's one born every minute. I'm going to assume that you just had a tourette's outbreak and that wasn't directed at anyone in particular.

OG
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