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The trickiest question in business that noone seems to get right: Q: How much money flows into "X" market? A: None, money flows THROUGH markets.
by RC_ITR 5y ago
The trickiest question in business that noone seems to get right:
Q: How much money flows into "X" market?
A: None, money flows THROUGH markets.
- WA 5y agoNot sure about that. Money velocity went down a lot. If you pay Apple money, Apple – the company – keeps that money as cash reserves in some form or another. This might be reinvested and circulates a bit more, but is it really spend in the real economy so that average Joe benefits from this?
- RC_ITR 5y agoDiscussion is around the stock market. Yes, when you buy newly issued shares from Apple (rare), cash flows through the stock market into Apple's accounts, but again, no money went 'into' the stock market. If you're talking about Apple selling devices, then it's another concept entirely.
- klipt 5y agoAlthough if you have X in circulation as money, and Y in stock market valuation, you could say Y/(X+Y) of total value is in the stock market. If the market valuation goes up to Y+Z, you could say money has "entered" the stock market, pushing its share of value to (Y+Z)/(X+Y+Z) even though the money in circulation, X, could be unchanged.
- medvezhenok 5y agoYes, although you could argue that money that was transferred from a checking account to a brokerage account has « flowed into » a market, at least for the time it takes to settle any trades and for the counter party to withdraw theirs (since it will not be used for consumption)
- RC_ITR 5y agoLol you’re giving me an opportunity to be snarky and I will not turn it down. :) Yes, when an item goes through something, it is briefly inside of that thing. I agree.