Fed Cuts Rates: Will RV Rates Follow?

ajriding wrote:
If stock market drops then for sure those who are Short Sellers win.
The money doesnt leave, someone has it somewhere. The stock market is a valuation of the worth of the sum of the stocks, not the sum of the money invested. Stocks can go to zero, but the money is always the same value and it just changes hands. If you buy Apple stock, then literally Apple get that cash money, on that day or that second the stock represents that same cash amount, but then stocks go up or down and become worth more cash or less cash, but Apple still has the cash you initially bought the stock with, that cash does not change.
Who loses? The ones with stock that lose value and who sell that stock at a lower value. You only gain or lose when you go to sell the stock, not during ownership.

Very few understand what the fed is so I wont attempt more there..

Enjoy the new RV and enjoy our great country!

I am speechless.......

DallasSteve wrote:

ajriding wrote:
If stock market drops then for sure those who are Short Sellers win.
The money doesnt leave, someone has it somewhere. The stock market is a valuation of the worth of the sum of the stocks, not the sum of the money invested. Stocks can go to zero, but the money is always the same value and it just changes hands. If you buy Apple stock, then literally Apple get that cash money, on that day or that second the stock represents that same cash amount, but then stocks go up or down and become worth more cash or less cash, but Apple still has the cash you initially bought the stock with, that cash does not change.
Who loses? The ones with stock that lose value and who sell that stock at a lower value. You only gain or lose when you go to sell the stock, not during ownership.

Very few understand what the fed is so I wont attempt more there..

Enjoy the new RV and enjoy our great country!

When you buy a stock on the stock market the company (Apple, in your example) does NOT get that money, unless it's something like an initial public offering (IPO). When you buy a stock most of the money goes to the person selling the stock and a little bit goes to the vampires running the show like your broker and the market makers on Wall Street. That's how they stay in business. In the long run the stock market is not a "zero sum game". That idea was made popular by the movie "Wall Street". In the long run the total value of stocks will increase so that money has to come from somewhere: the investors. But in the short run, individual trades, it is basically a zero sum game.

Butt...the market is not a zero sum game.

Lets say you purchased Tesla at $300. It goes up to $900. But the market is crashing and you sell to me on the way down to $700. Did you lose value? Did I gain at your expense? Or did we both win when Tesla closes at $750 the same day.

DallasSteve wrote:
In the long run the total value of stocks will increase so that money has to come from somewhere: the investors.

When the government (both parties) continues to pump billions of borrowed dollars into the economy, most things will increase in price. It is called inflation, folks.

ajriding wrote:
If stock market drops then for sure those who are Short Sellers win.
The money doesnt leave, someone has it somewhere. The stock market is a valuation of the worth of the sum of the stocks, not the sum of the money invested. Stocks can go to zero, but the money is always the same value and it just changes hands. If you buy Apple stock, then literally Apple get that cash money, on that day or that second the stock represents that same cash amount, but then stocks go up or down and become worth more cash or less cash, but Apple still has the cash you initially bought the stock with, that cash does not change.
Who loses? The ones with stock that lose value and who sell that stock at a lower value. You only gain or lose when you go to sell the stock, not during ownership.

Very few understand what the fed is so I wont attempt more there..

Enjoy the new RV and enjoy our great country!

When you buy a stock on the stock market the company (Apple, in your example) does NOT get that money, unless it's something like an initial public offering (IPO). When you buy a stock most of the money goes to the person selling the stock and a little bit goes to the vampires running the show like your broker and the market makers on Wall Street. That's how they stay in business. In the long run the stock market is not a "zero sum game". That idea was made popular by the movie "Wall Street". In the long run the total value of stocks will increase so that money has to come from somewhere: the investors. But in the short run, individual trades, it is basically a zero sum game.

If stock market drops then for sure those who are Short Sellers win.
The money doesnt leave, someone has it somewhere. The stock market is a valuation of the worth of the sum of the stocks, not the sum of the money invested. Stocks can go to zero, but the money is always the same value and it just changes hands. If you buy Apple stock, then literally Apple get that cash money, on that day or that second the stock represents that same cash amount, but then stocks go up or down and become worth more cash or less cash, but Apple still has the cash you initially bought the stock with, that cash does not change.
Who loses? The ones with stock that lose value and who sell that stock at a lower value. You only gain or lose when you go to sell the stock, not during ownership.

Very few understand what the fed is so I wont attempt more there..

Enjoy the new RV and enjoy our great country!

time2roll wrote:

Yosemite Sam1 wrote:
Didn't seem to realize how many time the Feds has rescued the economy. Specially that they've also politicized Keynesian economics, one more I need to unlearn, with trickle-down and Laffer Curve.

I look at historical charts and see the Fed creating more trouble and then get the credit for "saving" the economy. Left to the markets rates would have dropped sooner as the economy was slowing down. How do you think we end up with an inverted yield curve? Fed hesitates too long to lower rates is how it happens pushing toward a recession. Then rates finally get reduced and we are saved.

Between the Feds and the political class and their questionable records of running business, I'll take the Feds anytime.

Yosemite Sam1 wrote:
Didn't seem to realize how many time the Feds has rescued the economy. Specially that they've also politicized Keynesian economics, one more I need to unlearn, with trickle-down and Laffer Curve.

I look at historical charts and see the Fed creating more trouble and then get the credit for "saving" the economy. Left to the markets rates would have dropped sooner as the economy was slowing down. How do you think we end up with an inverted yield curve? Fed hesitates too long to lower rates is how it happens pushing toward a recession. Then rates finally get reduced and we are saved.

mich800 wrote:
And not sure where the theory the stock market or investing in general is a zero sum game came from. But this is RV.net not IBD.

Hopefully, a lot of these guys have a financial adviser.

steelhunter wrote:

If a stock suddenly becomes worthless who makes money?

I am sure our resident "experts" can explain it fully, but "Selling Short" is one method of making money from a stock that you correctly guess will be falling in price. Not for the faint hearted.

steelhunter wrote:

ajriding wrote:
The fed loans money to the banks who loan it to your local banks who loan it to you at interest. At low interest there is no profit to make loans to individuals who may or may not pay it back. Too low rate and the banks look for other investments to get a return on. Their job is not to make loans, it is to make money. This is why the stock market (prior the virus) was going so high - banks saw more return on stocks (even with the risk) than in making loans. The stock market is a dumb metric to measure the economy, but it is how "they" have always measured it, even for the last administration, so "he" is keeping and playing by the same rules of measure, and winning, lol.

The stock market does not lose money, the money stays in the market, but it changes hands. Investors may lose money, but someone else makes money, the sum total is always the same. If you give me money for my stock and then my stock value goes to zero then I still have your money, but since the stock you bought from me is now valued at zero, then I owe you zero. I made, you lost.
If that stock you bought from me doubles, then you can make double when you sell it, but I do not owe you double, I just owe you the original stock certificate, someone else may buy your stock, but not me, I have your money. You can get another person's money by selling at a profit or at a loss.

We do not need a privately owned international central bank to tell us what the interest rates should be. Pure stupidity on America's part. If you know what to listen for you hear Trump talk about removing the fed for good and returning the power back to our country. You will hear him constantly harp on the fed all the time, saying they are doing it wrong, and hurting the country. He does this so when the time comes the citizens have heard a lot about how bad the fed is and when T goes to remove them the citizens are mentally prepared. The prez always tells us what his plan is, but in a more coded way, he gives hints all the time, and sends messages to our enemies in plain sight. Sometimes he says kooky things but to the intended target audience is very pointed and direct and not the least bit kooky .Dont agree or disagree with this, just put it on the shelf and when you hear something run it through this filter and see what drops out.

Huh?
If a stock suddenly becomes worthless who makes money?

That, and the fed lowered the federal funds rate. So this impacts banks lending to each other not borrowing from the fed.

And not sure where the theory the stock market or investing in general is a zero sum game came from. But this is RV.net not IBD.