system
A chat on subreddit /r/wallstreetbets
human
Where did the wealth transfer too?
gpt
Its actually an interesting question. Let’s say you have a company and you own 50% of the shares. Let’s say the company is worth 2 million and there are 2 million shares for 1$ each. Now let’s say one of these shares is sold every day, everybody else keeps their investment. If there is good news and the stock is sold for 10$ suddenly the company is worth 20m, if people hear bad news and the stock is traded for 10Cents the company is suddenly worth 200k. In the end real value is only assessed once you change your stocks into Dollar. So basically if stocks drop there is no winner everybody just gets poorer.

Funnily enough you can borrow money against stocks so if asset values go up across the board the process is inflationary. So you could say that everybody who does NOT own stocks is worse off when stocks rises since they now have to compete for resources like houses, cars etc. with people who just made money because the stock market went up.