CB -
OK, stock prices aren't money but stocks are wealth. I believe the country didn't just lose $6 trillion of wealth, but it did lose something. Trillions of purchasing power, whatever you call that.
Stocks are wealth, but the question is how much.
If you hold the stock, you have a claim on all the future cash flows of the company and its future liquidation. To a first approximation, this is not affected by the day to day stock price variations. This is equally true for stock in a private company, not traded on the public market. What the public market allows you to do is trade limited amounts of stock if you judge that the market price is either too high or too low in comparison with what either the DPV of the future cash flows will be or what you expect the public market price will be in the future. However, to complete a trade, there must be a counterparty with an opposing judgement.
Regards, Don |
