Economy crash =/= stock market crash?

GazzaBloom

GSP said:

So if I have invested £100 in a company and it’s price/value falls 50%, and I cash what’s left and I receive £50.
Who’s got my other £50?

The same person that gets the 25% drop in value as a brand new luxury car rolls off the forecourt. It just evaporates!

The person you brought the £100 stock from gets your £100. When the value of that share you hold drops by 50% and is only worth £50 you haven't lost anything...until you decide to sell, then you have lost £50 in realised asset value, not £50 in cash.

Prism

GSP said:

k6chris said:

GSP said:

InvesterJones said:

FTSE 100 is in the green today, FTSE 250 up 1.73% as I type. Or do we not get commentary on green days?

Seems to be notable movements in just about everything on a daily basis.
All this money lost or down since November, where has it gone? Down a big black hole? Who has got it, or was it never there?

The money is never there.  The valuation of a company (and so the value of the index they are in) at any time is based on a calculation of the number of shares, multiplied by the value of the last trade (the current share price).  It would clearly be impossible to sell all the shares of a compnay at that 'last trade' value. So when the press says "billions wiped of share index today" it does not mean that #billions# were actually lost, just that a meaningless headline number got a bit smaller. The same nonsense happens when housing markets 'crash'.  Still the same number of houses!

Ho hum.

So if I have invested £100 in a company and it’s price/value falls 50%, and I cash what’s left and I receive £50.
Who’s got my other £50?

That's the thing - you don't have £100 invested in a company. You gave someone else £100 a while back to own a share of the company. That £100 is long gone. You then sold it to someone else for £50. The original seller gained £100, you lost £50 and the person you sold it to lost £50 (but got a share of the company too which may or may not be worth something)

GazzaBloom

Nebulous2 said:

masonic said:

Type_45 said:

VWRP closed 4.07% down.

Type_45 said:

FTSE 100 closed down 0.41%.

I can't imagine why you picked VWRP yesterday and FTSE100 today.

Well - I'm going to put my mouth where my money is.....

I've been building up some cash, mainly in a SIPP, since the middle of last year, and this morning I spent about a third of it on VWRP. 

I too am buying lumps of a US equity index fund each month but we should be mindful that this could last a while and have a way further to go. if you are a buy and hold investor with a 10-20 year window then the sun will once again shine but this next year or two is where that 2-3 year cash buffer or alternative source of income will come in for retirees...

Charts for S&P500 bear markets

We're only 111 days into this one...



And only 22% down so far...



And US stock valuations are still relatively high 

GSP

Cus said:

The person you bought it from for £100 and then sold back to him for £50.

 Liberty!
Actually seems like an element of Only Fools & Horses with some fingers burnt.

Type_45

Small investors are the fish food for the big hedge funds and pension funds. These big funds are trying to get their money out of the market because the trend is down. They can't do it all in one day because that will drive the price down too far and fast and they'll lose lots of money as they get out.

On green days like today they are putting word out (probably via the very "experts" who get quoted on this forum) that the bottom is in to keep people invested. Meanwhile, they are getting their money out.

GSP

Type_45 said:

Small investors are the fish food for the big hedge funds and pension funds. These big funds are trying to get their money out of the market because the trend is down. They can't do it all in one day because that will try the price down too far and fast and they'll lose lots of money as they get out.

On green day's like today they are putting word out (probably via the very "experts" who get quoted on this forum) that the bottom is in to keep people invested. Meanwhile, they are getting their money out.

And what do you think they are doing with all this money?

Type_45

GSP said:

Type_45 said:

Small investors are the fish food for the big hedge funds and pension funds. These big funds are trying to get their money out of the market because the trend is down. They can't do it all in one day because that will try the price down too far and fast and they'll lose lots of money as they get out.

On green day's like today they are putting word out (probably via the very "experts" who get quoted on this forum) that the bottom is in to keep people invested. Meanwhile, they are getting their money out.

And what do you think they are doing with all this money?

At the moment it's still tied up in the equities. Hence the whole thing hasn't collapsed yet.

InvesterJones

Type_45 said:

On green days like today they are putting word out (probably via the very "experts" who get quoted on this forum) that the bottom is in to keep people invested. Meanwhile, they are getting their money out.

It is indeed another green day (FTSE100 up 1.65% as I type), but I haven't seen any expert saying we've hit the bottom - can you provide links to any?

Type_45

InvesterJones said:

Type_45 said:

On green days like today they are putting word out (probably via the very "experts" who get quoted on this forum) that the bottom is in to keep people invested. Meanwhile, they are getting their money out.

It is indeed another green day (FTSE100 up 1.65% as I type), but I haven't seen any expert saying we've hit the bottom - can you provide links to any?

Charts suggest this week could be a ‘key moment’ for the S&P 500, Jim Cramer says

“Eventually the bears will run out of firepower and some of the money sitting on the sidelines will come back into the market,” the “Mad Money” host said. “This is a bullish scenario, people.”


https://www.cnbc.com/2022/06/14/cramer-charts-suggest-this-week-could-be-a-key-moment-for-sp-500.html

InvesterJones

Type_45 said:

InvesterJones said:

Type_45 said:

On green days like today they are putting word out (probably via the very "experts" who get quoted on this forum) that the bottom is in to keep people invested. Meanwhile, they are getting their money out.

It is indeed another green day (FTSE100 up 1.65% as I type), but I haven't seen any expert saying we've hit the bottom - can you provide links to any?

Charts suggest this week could be a ‘key moment’ for the S&P 500, Jim Cramer says

“Eventually the bears will run out of firepower and some of the money sitting on the sidelines will come back into the market,” the “Mad Money” host said. “This is a bullish scenario, people.”


https://www.cnbc.com/2022/06/14/cramer-charts-suggest-this-week-could-be-a-key-moment-for-sp-500.html

If I read that correctly, he's saying that IF S&P500 falls to 3500 then it could be a buying opportunity, not that we're at the bottom now.

"But without the recovery, the index could plunge to its next floor of support around 3,550, said Cramer.

"But, and this is a very big but, if we do get a decline to the 3,500s, she thinks that would be a buying opportunity. Of course, she could be wrong," Cramer said."