david merkelDavid Merkel submits:

For every buyer there is a seller. For every debit, there is a credit.

People often accept naive views of how the market works, perhaps considering how their own life seems to work, and not considering the other side of the trade. As an example, aside from laziness, why do market observers report a day where the market goes down on no significant news as “profit taking,” or grab at some lame smaller story which couldn’t explain the decline? For every seller, there is a buyer. No money went into or out of the market unless there was a new IPO, rights offering, company sale for cash, buyback, cash dividend, etc. People don’t run away from or run to the market; only the terms of the trade change at the margin.

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