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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: dvdw© who wrote (15497)	12/11/2002 11:04:41 AM
From: t2	Read Replies (1) \| Respond to of 19219

Your reply is absurd. Seriously? You could have possibly misunderstood me. My point is basically that...if the Nasdaq/Dow was to gain 10%, there is wealth creation. The losses of the shorts will be insignificant. But if it loses 10%, there is wealth destruction. So what if shorts gain; it is insignificant to the economy. Remember I am looking at the big picture. Almost all of the money is long and there is wealth destruction if the market goes down. Hope that clarifies it but if you still think that is absurd.......then you got a problem.

To: dvdw© who wrote (15497)	12/11/2002 12:58:04 PM
From: eddieww	Read Replies (1) \| Respond to of 19219

Any single transaction may be a zero-sum game, although if I thought about it a little I think I could present logic that refutes even that. However, thinking only of specific transactions is too narrow a way to think of wealth creation/destruction. The value of a stock is set on the margin by transactions that represent only a small % of the float. When a stock declines all of the holders suffer a loss of wealth. Since the spring 2000 top, several trillion $ has gone to clownbux heaven, possibly a couple trillion has shifted to other investments or uses, and shorts have made a little money. Short interest has never represented more than a couple % of the entire market float. There is no way to call the total effect of market action the past couple years "zero-sum". The only way you could claim that would be if short interest oscillated around 50% of total market float, so that every time a stock's price declined there would be someone gaining wealth for each one losing wealth.