Even Warren Buffet is taking a hit

i hope he loses all his money, that would be payback from him backing Obama.

bump

im realy trying to grasp whats going on. perhaps i am misunderstanding something.

A share of stock is nothing more than a piece of worthless paper (unless someone wants to buy it).

There is no value in the actual paper. The only value is derived from someone wanting to buy the share of stock. If no one wants to buy it and if everyone wants to sell their shares, then the market price drops.

In other words, the only frothy value per the market high of 14,000 was based upon impression, not reality. There is no "value" reality until someone sells their shares.

Therein, when an investor buys a share in say 2001 at 10 dollars and that same share is selling for 60 dollars in Oct. of 2007, that is only a perceived market value at that moment in time. There never was any money from anywhere added to the initial $10, turning it into $60. So when the market crashes and the $60 share returns to $10. It's a wash. Nothing disappears. $10 was only used to buy the share in the first place, i.e., it's all in the mind.

Now, there is the question of what happened to the money of those who bailed out at the top prices in Oct. 2007, i.e., those who chased out.

Where did that money go?

Maybe the smart money, like Warren Buffet, bought low and sold high. And maybe he parked his money in complete safety in T-bills or T-bonds or some such place (with little to no risk).

Then, when the market crashed -- because Warren's not stupid to ride a bear market down and hold on -- then when he thought he saw the bottom, he started . . .

Buying low to hold for the low-term climb back to the next big high.

Disclaimer. This is spin. This is a guess. This is not based upon any insider facts, per se -- per rather just one possible scenario.

nope not that easy. a stck sale requires a buyer. someone has to have made money.

thats at ipo. im talking about all the other sales

simple question i sell a stock someone else buys it. i buy a stock, someonelse sells it where is all the money btween djia 14000 and djia 8500 ?

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i want to ask a serious question. in order for a stock transaction to take place there must be a buyer and a seller right?

so, whoever sold stocks prior to the crash made money(presumably).

there was no evaporation of wealth.

so where is it?

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Valid question. You realized that if the stock is zero sum, then where did the wealth go.

The wealth went into other investments that were deemed to be better. In scenarios like this, you'll see the demand and price for safer investments, like bonds, and treasury bills go up.

The stock market indexes we always refer to are not, by any means, a summary of the nation's wealth. They're just an indicator we use, because it has stocks/investments from most parts of our economy in it.

In essence, a low stock market doesn't mean wealth disappeared, rather it means there is lower expectations of future profits, relative to alternative investments/opportunity costs.