Short Term Trading Member Forum

[mr_cash4]

pegwatcher/manti, in the long run, actually about every 50 years or so, ALL stocks go to (virtually) zero.

in 1932, DJIA lost 89% of its value from the peak in 1929, and was actually at a lower point than when DJIA was established in 1895 - and these were (and still are) the BLUE CHIPS, so if they lost 89%of the value from the peak and actually reached a LOWER POINT than when DJIA was established in 1895, imagined at what prices other stocks that did not trade on the Big Board (NYSE) i.e. that traded on the "Curb" went to

in 1982, according to Marty Zweig in "Winning on Wall Street", DJIA lost almost 80% from its peak in 1966 in INFLATION-ADJUSTED (i.e. REAL) terms - again, if the blue chips lost that much, imagine where the rest of (i.e. more "speculative") stocks went to (i.e. the "Go-Go" stocks of the 1970s bubble).

there were also stock market crashes in 1880s and before that in 1820s where all stocks went to virtaully zero as well - we don't have actual price data, but that's what claimed in "Devil Take the Hindsight" - and in 1820 we also had such a severe recession that estimated 75% (yes, SEVENTY-FIVE PERCENT) of U.S. population was unemployed (it's was "MERELY" 25% unemployment during 1930s) (source: "Devil Take the Hindsight")

during "Tulipmania" crash in Holland, at the bottom the prices were settled at 5% of the value by governmental decree (source: "Devil Take the Hindsight") - hence, 95% loss

the list goes on and on regarding the way for all other examples (i.e. South Sea Bubble, etc. etc. etc.), i.e. in the final analysis, the stocks go to (almost) zero, and then the cycle starts anew - and that is exactly what the Kondratieff cycle is.

so, in the LONG RUN, the stock market is a (virtual) zero-sum game, even if in the short run that is not readily apparent - but, again, both the options market and the futures market confirm that the stock market is a zero-sum game due to the options/futures contracts expirations which are every 1 (options) and 3 (futures) motnhs, so because of those very short expiration durations we can clearly see that both the options and futures markets are zero-sum - but that information is "masked" in the (general) stock market because there are NO expiration months for stocks, but nonethelss in the long run it's still holds true.