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Strategies & Market Trends : Rande Is . . . HOME

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To: velociraptor_ who wrote (49135)	3/14/2001 10:02:29 PM
From: Qone0	Read Replies (3) of 57584

Let's say you have 100 people all willing to pay $10 for a stock for a total cash supply of $1000. The next day bad news comes out. Now lets say all 100 want out but you only have buyers at the $5 level and nothing above that. The 100 get out and collect $500 total cash Hmmm.....where did that other $500 go? That is somewhat true. Market Cap. does vanish into thin air. Without the value of the market Cap. changing hands in shares of stock bought and sold. But that also works the other way to the up side. Lets say the people who bought the shares at $500 on the bad news. The very next day REALLY <g> good news comes out and the stock gaps up to $20.00. Wealth has just been created out of thin air. Just like it was lost out of thin air the day before.

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