Monday, 18 January 2010
Where Does The Money In The Stock Market Come From?
Everybody comes to the stock market with one objective - to make money?
Since everybody want to make money; where does the money from the stock market come from?
There are some money coming from companies paying out periodically as stock dividends, capital reduction or shares buy-back; but it is not much money compare to the enormous size of the money change hand in each trading day.
Most of the money made in the stock market come from capital gains through Greater Fools distributing their money to the Better Fools.
It is foolish to expect to make money in the stock market where in fact there is so little money to make from stock dividends, capital reduction or shares buy-back. So all stock market participants are indeed fools. It is either you are Greater Fools or Better Fools.
Better Fools make most of their money from the Greater Fools and perhaps some money from the stock dividends and capital reduction as well.
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