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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (13972)	1/26/2002 12:35:56 PM
From: Don Lloyd	Read Replies (2) \| Respond to of 74559

CB - Then zero-sum isn't the proper term for what we were talking about. Which is my old question, where did the money go? Enron is a great example because the market cap was what? Billions. And eventually the market cap went to zero. The starting point is to explain why the vending machines for soft drinks and newspapers are designed differently. Why don't newspapers come rolled up in a can and why don't soft drinks sit in an open rectangular tray in a refrigerated box? Regards, Don

To: Ilaine who wrote (13972)	1/26/2002 6:50:06 PM
From: Moominoid	Read Replies (1) \| Respond to of 74559

Now I think you are on to something, or at least I understand it. But it gets more complicated. For someone who bought a few years ago and then sold after the peak they may still have made a profit though their peak wealth fell. Some of the total is transferred from buyers to sellers, but a lot is just blown away as the relatively small amount of trade can leverage a big move in price. You'd want to look at the daily volume as percent of shares outstanding vs the percent price move. On days when the latter is bigger than the former in absolute value that is when market cap is evaporating rather than being transferred. You should be able to do a daily accounting exercise for each stock, with just OHLC and volume data as well as shares outstanding it would only be approximate but give some notion as to what was going on.