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> I'm astonished that somebody could think stock losses are somehow less harmful than losing cash. That's just wrong. People behave much differently if the mak

• crazygringo 4y ago
  No they don't, not if they have to spend the money now -- like on a down payment for a house. There is literally no difference in wealth between losing $100K in cash or in stock, assuming the stock is liquid. They are equally "real", 100%. And the wealth effect has literally nothing to do with this. (Fine print: assuming your stock is no more than a small fraction of any specific company, and that these might have different effects on taxes. But the general point stands.)
  • funstuff007 4y ago
    > No they don't, not if they have to spend the money now -- like on a down payment for a house If they have to spend the money now, it would already be in cash.
    • crazygringo 4y ago
      That doesn't make any sense and has nothing to do with the discussion at hand. But if you need to spend the money now, you sell the stocks now so they become cash, which means the stock value is identical to the cash value. That's the whole point. There's no difference between "paper value" and cash value. They're the same. I mean it might take a couple of days for the trade to settle so you can wire it, but that not the point. The value is just as instantaneous and liquid as cash for all practical purposes, for publicly traded companies generally.
      • funstuff007 4y ago
        nobody's buying your model of the world and its infinite series of instantaneous of nows.