Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Book Nook -- Ignore unavailable to you. Want to Upgrade?

To: Don Lloyd who wrote (418)	2/16/2002 5:10:13 PM
From: Don Lloyd	Read Replies (1) \| Respond to of 443

Putting things together, a stockholder is in the same position as a depositor in a fractional reserve bank. Any one individual can probably redeem the full value of his account, but if everyone tries to do it, it doesn't work. Why would everyone try to do it? Because they finally realize this fact and lose confidence that nobody else is going to race them to the exit. Regards, Don

To: Don Lloyd who wrote (418)	2/17/2002 9:29:57 AM
From: Ilaine	Read Replies (1) \| Respond to of 443

This is the type of thing that's easy to see if you trade stock online as you watch the bid and the ask moving but how in the world to explain to someone who's never done it? Based on the kids in my classes I'd guess that a small percentage has, so far all young men, no more than 10% if that many, and this is a rich, high tech area. Not that only young men do it, but you can see from SI that the percentage of women is small.

To: Don Lloyd who wrote (418)	6/17/2005 11:44:24 AM
From: Bernard Guerrero	Read Replies (1) \| Respond to of 443

Don, This point is generally true, but isn't it trivial? The same can be said for any asset/exchange, including cash, gold, etc. If I find myself sitting on a hoard of gold coins in the middle of a large-scale drought/crop failure, I will doubtless find that inflation has suddenly eaten away a great deal of my purchasing power, at least in terms of food and water. The seller may prefer my gold, or may prefer trade-in-kind or some other form of exchange depending on the exact circumstances. All market prices are correct, and all market prices are transitory. The danger is in marking-to-market and then fooling yourself into thinking that you are looking at the correct price, written in stone for all eternity. Some sort of VaR is much more appropriate, at least in dynamic situations.