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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: dougjn who wrote (16063)	10/6/1998 7:00:00 PM
From: Joe NYC	Read Replies (1) \| Respond to of 152472

Doug, So how can the value just disappear? This is why. Say Qcom goes down 3 a share on some particularly nasty day. Who got that money? Nobody. Somebody bought the shares 3 lower. But there was no guarantee they would go back up. There's the future possibility, and yes, likelihood, at least eventually. The 3 simply disappeared. Further, most owners of Qcom didn't trade that day. Yet their stock declined 3 per also. Who got that money? Nobody. But do you care how much dollars you have or how much wealth you have? A share of QCOM is wealth which can translate to different amounts of dollars on any given day, but it remains a (reasonably) fixed percentage of the company. On the day after the stock went down $3, the company made the same number of wireless phones as on the previous day. So in reality, the next day, there is more wealth in the world (one day worth of phone production) than the previous day, even though the conversion ratios (from one form of wealth to another) changed. Joe

To: dougjn who wrote (16063)	10/6/1998 8:00:00 PM
From: Maurice Winn	Read Replies (2) \| Respond to of 152472

Doug, I like clear, blunt, frank and unequivocal because it is less slippery than opaque, obfuscation and tortuous. You said, "As for your notion that money in the market doesn't just disappear: I'm afraid that calls for a blunt and unequivocal response. You are wrong. It does, during declines." You have just made the mistake that most people make. They confuse the momentary quoted value of a stock as being real money. It is not. It is quoted as dollars but it is not dollars. You are wrong. Money does not disappear during a crash. The value a person thought they had has disappeared. They did think they were rich and did go shopping on borrowed money, lent on the expectation that the stock was really worth the quoted figure, but only 50% loaned because lenders know that the value can evaporate quickly. They expect 50% will give them a chance to clear the position and recover the debt if values fall. I'll once again tell the story of the guy who found a small, little traded stock. He checked it out, decided it was good, and bought some. A month later, he saw quoted prices were higher, so put more into it as things seemed to be going well. A month later, he put another few thousand in, at still higher prices, he being quite excited at how the stock price was rising. He inherited a dollop more, added it to his wife's income and bought more, since his average was still quite low and the company, although not reporting huge profits, was looking sound. This purchase was at a higher price still. He then laid off buying for a few months and was disappointed to see the price drifting down. So he phoned the broker, having heard there was a market decline coming up, saying sell the lot. The brokers asked, "Who to? You were the only one buying all this time." The stock price is not money. It [I know you know this and that you just got careless] is just the quotes at the margin by the very few people interested in buying or selling at that moment. Because a few maniacs pay a high price for a stock, or sell at a silly low price in panic, doesn't mean that everyone can sell at that high price or buy at the low. That is why you are unlikely to pick the bottom. Many people are looking for it. Ramsey is in cash. You are. Marginmike is. Heaps of you are. $ill Gates has billions in cash. So does Warren. So does the Fed. Where is all this cash going to go when you all get sick of 3%? Are you all going to pick the bottom? Good luck, you'll need it. Money is like water in fluid mechanics. It has momentum, Reynolds number, friction, hydrostatic head, continuity and wave functions. It doesn't go away or appear unless Alan Green$pan adds more from his monopoly well. Stock values are not dollars although quoted in them. They are tradeable commodities producing valuable goods and services. Another cell phone produced is an increase in the world's wealth as pointed out. Mqurice [no cash and margined!]