Market buying and selling

**azanon** · 05-04-2007, 02:18 PM

I want to bring up a few things from today's discussion. Tom said:

Let's say that there are just 100 people who control the total market. They are the only ones doing the buying and selling, and let's say all 100 say they are currently bearish. Where do you think the market would go from there? Because they are all bearish, they are likely to have all of their money in cash or somewhere other than in stocks.

So, who is left to sell? No one. At worst, the market would stay where it is, that is until one of those 100 folks realizes that the market isn't going down anymore and perhaps he decides he'd rather take a shot at stocks again after being bored by the 4% or 5% his cash account made him.

Tom, for every buyer there is a seller. When you sell a stock at "market price", you aren't selling it back to the company. You're selling it to someone who's willing to pay the current "ask" price.

There are a finite amount of shares of a given stock owned by individuals at any given time, and this amount doesnt change day to day. It only changes when a company decides to sell more shares. For example, Microsoft company has exactly 9.57 billion shares owned by individuals/companies today. They will have 9.57 billion owned next week, and the week after that too.

So this idea of more or less people being in or out of the market is basically nonsense.

Once the last of our 100 investors decides he can no longer take the pain of missing the rally, we now have 100% of our investors calling themselves bullish. Now what happens? The market stops going up because there is no one left to buy. Now the market can start to move lower again.

That's why too many bears is bullish for stocks, and too many bulls is bearish. get it?

See answer above. What changes isn't the number of people in the market. The only change that occurs is what these people/companies are collectively willing to pay for the finite number of shares that are already distributed and sold.

When an IPO is issued, the total shares made available for sell, i presume are scarfed up before the first day ends. Again, the only thing that changes is the price of those shares. If they're deemed not valuable by the masses, the share price drops.

Yes, there are price splits and reverse splits, but these happen on a specific day and that day generally has no correlation with a bad or good day on the market.

**mlk_man** · 05-04-2007, 02:25 PM

What an idgit. So when I sell my mutual funds and go to cash, am I in the market or out? OUT!!!!!!!!!!!!!!!!

That is NOT nonsense...................

**azanon** · 05-04-2007, 02:54 PM

When you sell the shares in your mutual fund, someone else buys the stocks that composed those shares of those mutual funds from you.

Are there any other questions? I'll even answer the rude ones like the one above.

**mlk_man** · 05-04-2007, 03:00 PM

Originally Posted by azanon

When you sell the shares in your mutual fund, someone else buys the stocks that composed those shares of those mutual funds from you.

Are there any other questions? I'll even answer the rude ones like the one above.

Not true. But you're really not worth the explanation.............

**Birchtree** · 05-04-2007, 03:02 PM

He can't help himself - the universe is grumpy. I should know.

**azanon** · 05-04-2007, 03:02 PM

Originally Posted by mlk_man

Not true. But you're really not worth the explanation.............

Oh its definitely true you moron. You weren't worth the response; its was actually more for the benefit of others.

Milkman thinks when he sells shares of a stock, no one buys them. Does this guy really market time?

**azanon** · 05-04-2007, 03:06 PM

I have a neat idea; why doesn't someone discuss the topic I brought up instead of engaging in personal attacks. Should i just assume everything i said was correct, since no one has an actual rebuttal?

**mlk_man** · 05-04-2007, 03:12 PM

Originally Posted by azanon

Oh its definitely true you moron. You weren't worth the response; its was actually more for the benefit of others.

Milkman thinks when he sells shares of a stock, no one buys them. Does this guy really market time?

Moron? LOL

So you're telling me, well everyone, that if I sell a mutual fund but no one wants to buy the stocks that are incorporated in that fund, then I can't sell it? Hmmmm, news to me. Plus, when I buy or sell a fund, I get the days closing NAV. If the market is closed, who's buying?

Putz...........................

**Wolverine** · 05-04-2007, 03:22 PM

Originally Posted by azanon

I want to bring up a few things from today's discussion. Tom said:

Tom, for every buyer there is a seller. When you sell a stock at "market price", you aren't selling it back to the company. You're selling it to someone who's willing to pay the current "ask" price.

There are a finite amount of shares of a given stock owned by individuals at any given time, and this amount doesnt change day to day. It only changes when a company decides to sell more shares. For example, Microsoft company has exactly 9.57 billion shares owned by individuals/companies today. They will have 9.57 billion owned next week, and the week after that too.

So this idea of more or less people being in or out of the market is basically nonsense.

See answer above. What changes isn't the number of people in the market. The only change that occurs is what these people/companies are collectively willing to pay for the finite number of shares that are already distributed and sold.

When an IPO is issued, the total shares made available for sell, i presume are scarfed up before the first day ends. Again, the only thing that changes is the price of those shares. If they're deemed not valuable by the masses, the share price drops.

Yes, there are price splits and reverse splits, but these happen on a specific day and that day generally has no correlation with a bad or good day on the market.

My initial question for Tom was based on this in the Sentiment Survey area..................Trading results using the survey as a contrarian indicator

This is what confused me at first and then it seemed to tell me if the survey was saying Sell.......you should then be buying?

As far as I know there has always been a buyer and a seller in order for the markets to work.

I can see his example to some extent but yet this still needs to be cleared up better

This contrarian indicator is what I was seeing wrong with the sentiment survey

Thanks for more clear splaining and all. LOL

**azanon** · 05-04-2007, 03:23 PM

Originally Posted by mlk_man

Moron? LOL

Milkman, i consider every other possible alternative before i will go with returning a personal attack. But in your case, you have posted nothing but rude comments every single time I post here. That being said, I truly believe it was the appropriate thing to say in your case. And yes, I can really believe you would find it humorous.

So you're telling me, well everyone, that if I sell a mutual fund but no one wants to buy the stocks that are incorporated in that fund, then I can't sell it? Hmmmm, news to me.

So what's wrong with learning something new today? Don't be offended by that.

Yes, when you try to sell a stock, there must be a buyer. If more people want to sell than to buy at a given bid and ask prices, then those two price points drop UNTIL the number of people wanting to buy and sell is equal again. In short, what changes is the price itself, not the number buying vs selling. SOMEONE always wants to buy shares of almost all stocks, unless its detined to become a "penny" stock. There are millions of people with "buy orders" at price points all along the spectrum of possible prices.

Plus, when I buy or sell a fund, I get the days closing NAV. If the market is closed, who's buying?

The day's closing NAV reflects the market prices at the end of the trading day for the stocks that compose a given fund.

You're going to make it hard for yourself if you try to think in terms of funds instead of just stocks. Mutual funds are nothing more than collectively owned securities of some type, such as stocks. The actual securities (which compose the funds) are sold during the trading day, not after hours. And when they are sold, someone or some company buys them from the fund manager who sold them because you requested him to do so.

Putz...........................

See my sentiments above. I'm willing to withdraw them when you become more open to learning something and become less of a know-it-all.

I actually dont mind know-it-alls if they actually can back it up. You cant.

Azanon

**Birchtree** · 05-04-2007, 03:29 PM

Has anyone ever heard of inventory?

**azanon** · 05-04-2007, 03:36 PM

Originally Posted by Birchtree

Has anyone ever heard of inventory?

My mindreading skills are admittingly poor so i'll do my best at try to deduce which of the many responses you were referring to.

If Milkman sold shares of a fund, its possible the fund manager could just pay him, specifically, out of some cash they had on-hand. But, obviously, if enough people put in "sell orders" or requests to sell MANY fund shares, then the fund manager will have no choice but to actually liquidate some of the stocks that compose the funds to pay the people requesting sells. Looked at holistically, thats what actually happens.

If a lot of fund are putting in sell orders, then naturally the prices of those stocks that compose the fund are going to drop until sellers = buyers, and that will result in a NAV drop. Again, for every seller there must be a buyer.

Has anyone heard this saying before? Everyone has a price. That's true for stocks too. There's someone that will always buy your stocks from you, the only question is how much are they going to pay for them.

....
If that wasn't what you were asking about, maybe consider being more specific next time.