Financial Values Can Disappear
(Excerpt, Conquer the Crash, ch. 9)

People seem to take for granted that financial values can be created endlessly seemingly out of nowhere and pile up to the moon. Turn the direction around and mention that financial values can disappear into nowhere, and they insist that it is not possible. “The money has to go somewhere…It just moves from stocks to bonds to money funds...It never goes away…For every buyer, there is a seller, so the money just changes hands.”

That is true of the money, just as it was all the way up, but it’s not true of the values, which changed all the way up.

Asset prices rise not because of “buying” per se, because indeed for every buyer, there is a seller. They rise because those transacting agree that their prices should be higher. All that everyone else -- including those who own some of that asset and those who do not -- need do is nothing.

Conversely, for prices of assets to fall, it takes only one seller and one buyer who agree that the former value of an asset was too high. If no other bids are competing with that buyer’s, then the value of the asset falls, and it falls for everyone who owns it. Financial values can disappear through a decrease in prices for any type of investment asset, including bonds, stocks and land.



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As for my research I have learnt that most of us suffer losses because we tend to ignore the basics. I have changed my thinking to match to@mnandii foundations above to reap abundantly this year 2016.

Check out the daily bitcoin chart for this month.
475 - 350 in 8 days
The last 48 hours epic drop.

I did an Elliott analysis about a month ago suggesting that bitcoin should drop to about $85. Am waiting with bated breath! You can imagine buying at that price then it explodes to past $1500 in the next one year or so.

The other advantage is that bitcoin is money!

Thanks. I suggest a thorough reading of the Elliott literature I posted on before as well as downloading the videos.

Waiting to make this play too if the drop happens.

Since we are headed to February and most companies will post profits we are likely to break upwards NSE index 4040 points.

According to accurate research the NSE20 has completely bottomed out expect exponential rally from today all the way to February.

@spikes, the market will rebound but as long as 4000 critical support has broken down that rebound will not be sustainable because the investor psychology has been shredded. This is what makes sellers stall the bulls as they pile up to cash out of losses as the rebound gives them lesser squeeze. Plenty of investors are trapped in bad positions and the rebound will likely tempted them to sell on the bounce.

We will get a proper bottom when it feels like it's bottomless. 2015 selloff didn't trigger that kind of sentiment. If you were in the market back in 2008 (GFC) and 2011 (KES crash/inflation spike) you'd understand that sinking feeling (capitulation). At that point a lot of guys give up on stocks (no sellers). That's when the major bottom kicks in.