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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Mark Adams who wrote (107584)6/8/2001 1:25:25 PM
From: pater tenebrarum  Read Replies (1) of 436258
 
i agree basically. however, who's to say the sellers of shares use that capital for investing? they may just as well use it for consumption. in fact, that IS what has widely happened during the boom. and on credit to boot, i.e. many people, instead of selling shares to free up capital for consumption opted to borrow money instead, using their 401 k's as collateral, so as not to 'miss out' on further market gains. now the value of their portfolios has evaporated, but the debts remain.

and the fact that share trading is basically a zero sum game is hard to get around. after all, there's a buyer for every seller.

i agree that the managements printing up and selling the shares are the ones who profit most from the game...aside from perhaps the investment banks that skim off the fees from a multitude of share offerings.
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