Showing posts with label Charles Biderman. Show all posts
Showing posts with label Charles Biderman. Show all posts

Saturday, January 03, 2009

Pop

Perhaps the fall will be faster.

In this piece, Charles Biderman explains that the value of a stock is set by marginal purchases, which do not reflect what you'd get if you sold all the company's shares at the same time. He estimates that from 2003-2007 the world's equities increased in notional value by $25 trillion, on nothing more than $1.5 trillion cash, a bit of borrowing and mostly, illusion: "Market cap and money aren't necessarily related."

When the illusion goes pop, so do all the gains. First out gets the most.

htp: zgirl