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I think we're making this way too complicated by looking at bids,
offers, who is buying and selling, and all that micro stuff. Setting
aside Ira's point that stocks have no intrinsic value, let's look at the
big picture. The total value of a stock is its price times the number of
shares. The number of shares stays the same (usually.) So, price goes
up, the market cap of the company goes up and "money (wealth) flows into
the market." Price goes down, the market cap of the company goes down
and "money (wealth) flows out of the market."
Where does the money go when it flows out of the market? Simple. It goes
to money heaven. Tune in next week for a simple explanation of the
mysterious and often misunderstood tooth fairy. :-)
--
Dennis
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