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Strategies & Market Trends : ZenWarrior's Trading Paradise -- Ignore unavailable to you. Want to Upgrade?

To: p40warhawk who wrote (339)	4/3/2001 8:37:53 PM
From: manfmnantucket	Respond to of 2462

The Debate Continues... p40. I respect your opinion, but we have differing premises, I think, and so our conclusions may both be correct. >A stock is "worth" its price if someone buys it. True with anything else Well, I'll grant you that much. But I'd phrase it differently: a stock is only worth what someone will pay for it at any instant, and has negligible intrinsic value. You can't sail in it, or rent it, like a boat, for example. >Sometimes "necessity" forces us to buy or sell when When are we ever forced to buy? The way I see it, people really buy stocks because they think prices are going up. Whatever the reason or justification for the immediate price. They sell because it's not going up or is going down, usually of necessity. They rarely enter/exit via worth calculations at either end, in practice. They sense price movement and respond with two instincts - fear and greed. >Of course the buyer and seller have a fundamental disagreement on value. If I sell you a widgit for a dollar So, I think this classical macroeconomics model doesn't apply, really, in an auction market. Usually a manufacturer sets the price of a widget according to its "elasticity", measuring how many buyers they'll gain or lose by moving the price. In a stock auction/negotiation, price is what moves in response to herd buying and selling. An interesting inversion...yes? I hope you'll say I have you wondering about your premise on investing too - I secretly enjoy making people puzzled, just for thehellofit... :-) MfN