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> Nobody else picked up those 99 dollars. Except the person who sold the stock for $100.
by UncleEntity 3y ago
> Nobody else picked up those 99 dollars.
Except the person who sold the stock for $100.
- bluepizza 3y agoPerson A holds 1 stock, valued at 100. Person A sells 1 stock to person B. Now Person A holds 100 in cash, and 0 in assets. Person B now holds 0 in cash, and 100 in assets. Fast forward 5 years. The stock price has crashed to 1 dollar. Person A still holds 100 in cash and 0 in assets. Person B holds 0 in cash, and 1 in assets. There was no transfer of 99 dollars back from Person B to Person A. Person A's holdings were invariant because they don't own the stock anymore. The losses brunt by Person B were not transferred to anybody else. Money doesn't travel back in time.
- mannykannot 3y ago> Money doesn't travel back in time. Correct - the transfer happened when you bought the stock. What you have lost is the expectation of getting it back (or at least the expectation of getting it back today.)