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I don’t know if like the spoiled grain analogy. If my stock portfolio was worth $1000 yesterday and is only $800 we don’t say the $200 was destroyed. I have th
by puszczyk 4y ago
I don’t know if like the spoiled grain analogy.
If my stock portfolio was worth $1000 yesterday and is only $800 we don’t say the $200 was destroyed. I have the same number of stock. It may go down further, but it can also go up to say $1100 tomorrow. Is this a new being value created, or only capricious market pricing things differently?
Until I sell, there is no real gain or loss. And for the farmer, if the grain goes bad it’s not temporarily, it will never recover. This might have been a better analogy if the underlying real estate was destroyed (uninsured and fire, etc).
- cortesoft 4y agoWe do say $200 of value was destroyed when your stock portfolio goes down $200, though. If you think about it, it is the same thing… that real estate value is owned by some business that has shareholders (either public or private)… the $500 billion in value that was destroyed came from the shareholders of the real estate companies. It is the same thing.