Compelling Logic

An atheist professor of philosophy speaks to his class on the problem
science has with Krishna. He asks one of his new students to stand and.....

Professor: You are a Hare Krishna devotee, aren't you, son?

Student: Yes, sir.

Prof: So you believe in God?

Student: Absolutely, sir.

Prof: Is God good?

Student: Sure.

Prof: Is God all-powerful?

Student: Yes.

Prof: My brother died of cancer even though he prayed to Krishna to heal
him. Most of us would attempt to help others who are ill. But Krishna
didn't. How is this Krishna good then? Hmm? (The student is silent.)

Prof: You can't answer, can you? Let's start again, young fella. Is God
good?

Student: Yes.

Prof: Is Satan good?

Student: No.

Prof: Where does Satan come from?

Student: From...God...

Prof: That's right. Tell me son, is there evil in this world?

Student: Yes.

Prof: Evil is everywhere, isn't it? And God did make everything. Correct?

Student: Yes.

Prof: So who created evil?

(The student does not answer.)

Prof: Is there sickness? Immorality? Hatred? Ugliness? All these terrible
things exist in the world, don't they?

Student: Yes, sir.

Prof: So, who created them?

(The student has no answer.)

Prof: Tell me, son. Do you believe in Krishna?

Student: Yes, professor, I do.

Prof: Science says you have 5 senses you use to identify and observe the
world around you. Have you ever seen Krishna?

Student No, sir.

Prof: Tell us if you have ever heard your Krishna?

Student: No, sir.

Prof: Have you ever felt your Krishna, tasted your Krishna, smelt your
Krishna? Have you ever had any sensory perception of Krishna or God for that
matter?

Student: No, sir. I'm afraid I haven't.

Prof: Yet you still believe in Him?

Student: Yes.

Prof: According to empirical, testable, demonstrable protocol, science says
your Krishna doesn't exist. What do you say to that, son?

Student: Nothing. I only have my faith.

Prof: Yes. Faith. And that is the problem science has.

Student: Professor, is there such a thing as heat?

Prof: Yes.

Student: And is there such a thing as cold?

Prof: Yes.

Student: No sir. There isn't.

(The lecture theatre becomes very quiet with this turn of events.)

Student: Sir, you can have lots of heat, even more heat, superheat, mega
heat, white heat, a little heat or no heat. But we don't have anything
called cold. We can hit 458 degrees below zero which is no heat, but we
can't go any further after that. There is no such thing as cold. Cold is
only a word we use to describe the absence of heat. We cannot measure cold.

Heat is energy. Cold is not the opposite of heat, sir, just the absence of
it.

(There is pin-drop silence in the lecture theatre.)

Student: What about darkness, Professor? Is there such a thing as darkness?

Prof: Yes. What is night if there isn't darkness?

Student: You're wrong again, sir. Darkness is the absence of something. You
can have low light, normal light, bright light, flashing light.....But if
you have no light constantly, you have nothing and it's called darkness,
isn't it? In reality, darkness isn't. If it were you would be able to make
darkness darker, wouldn't you?

Prof: So what is the point you are making, young man?

Student: Sir, my point is your philosophical premise is flawed.

Prof: Flawed? Can you explain how?

Student: Sir, you are working on the premise of duality. You argue there is
life and then there is death, a good God and a bad God. You are viewing the
concept of God as something finite, something we can measure. Sir, science
can't even explain a thought. It uses electricity and magnetism, but has
never seen, much less fully understood either one. To view death as the
opposite of life is to be ignorant of the fact that death cannot exist as a
substantive thing. Death is not the opposite of life: just the absence of
it.

Now tell me, Professor. Do you teach tour students that they evolved from a
monkey?

Prof: If you are referring to the natural evolutionary process, yes, of
course, I do.

Student: Have you ever observed evolution with your own eyes, sir?

(The Professor shakes his head with a smile, beginning to realize where the
argument is going.)

Student: Since no one has ever observed the process of evolution at work and

cannot even prove that this process is an on-going endeavour, are you not
teaching your opinion, sir? Are you not a scientist but a preacher?

(The class is in uproar.)

Student: Is there anyone in the class who has ever seen the Professor's
brain?

(The class breaks out into laughter.)

Student: Is there anyone here who has ever heard the Professor's brain, felt

it, touched or smelt it?.....No one appears to have done so. So, according
to the established rules of empirical, stable, demonstrable protocol,
science says that you have no brain, sir. With all due respect, sir, how do
we then trust your lectures, sir?

(The room is silent. The professor stares at the student, his face
unfathomable.)

Prof: I guess you'll have to take them on faith, son.

Student : That is it sir.. The link between man & god is FAITH.

That is all that keeps things moving & alive.

When stock prices drop, where's the money?

Have you ever wondered what happened to your socks when you put them into the dryer and then never saw them again? It's an unexplained mystery that may never have an answer. Many people feel the same way when they suddenly find that their brokerage account balance has taken a nosedive. So, where did that money go? Fortunately, money that is gained or lost on a stock doesn't just disappear. Read to find out what happens to it and what causes it.

Disappearing money
Before we get to how money disappears, it is important to understand that regardless of whether the market is in bull (appreciating) or bear (depreciating) mode, supply and demand drive the price of stocks, and fluctuations in stock prices determine whether you make money or lose it.

So, if you purchase a stock for $10 and then sell it for only $5, you will (obviously) lose $5. It may feel like that money must go to someone else, but that isn't exactly true. It doesn't go to the person who buys the stock from you. The company that issued the stock doesn't get it either. The brokerage is also left empty-handed, as you only paid it to make the transaction on your behalf. So the question remains: where did the money go?

Implicit and explicit value
The most straightforward answer to this question is that it actually disappeared into thin air, along with the decrease in demand for the stock, or, more specifically, the decrease in investors' favorable perception of it.

But this capacity of money to dissolve into the unknown demonstrates the complex and somewhat contradictory nature of money. Yes, money is a teaser - at once intangible, flirting with our dreams and fantasies, and concrete, the thing with which we obtain our daily bread. More precisely, this duplicity of money represents the two parts that make up a stock's market value: the implicit and explicit value.

On the one hand, money can be created or dissolved with the change in a stock's implicit value, which is determined by the personal perceptions and research of investors and analysts. For example, a pharmaceutical company with the rights to the patent for the cure for cancer may have a much higher implicit value than that of a corner store.

Depending on investors' perceptions and expectations for the stock, implicit value is based on revenues and earnings forecasts. If the implicit value undergoes a change - which, really, is generated by abstract things like faith and emotion - the stock price follows.

A decrease in implicit value, for instance, leaves the owners of the stock with a loss because their asset is now worth less than its original price. Again, no one else necessarily received the money; it has been lost to investors' perceptions.

Now that we've covered the somewhat "unreal" characteristic of money, we cannot ignore how money also represents explicit value, which is the concrete worth of a company. Referred to as the accounting value (or sometimes book value), the explicit value is calculated by adding up all assets and subtracting liabilities. So, this represents the amount of money that would be left over if a company were to sell all of its assets at fair market value and then pay off all of liabilities.

But you see, without explicit value, implicit value would not exist: investors' interpretation of how well a company will make use of its explicit value is the force behind implicit value.

Disappearing trick revealed
For instance, in February 2009, Cisco Systems Inc had 5.81 billion shares outstanding, which means that if the value of the shares dropped by $1, it would be the equivalent to losing more than $5.81 billion in (implicit) value. Because CSCO has many billions of dollars in concrete assets, we know that the change occurs not in explicit value, so the idea of money disappearing into thin air ironically becomes much more tangible.

In essence, what's happening is that investors, analysts and market professionals are declaring that their projections for the company have narrowed. Investors are therefore not willing to pay as much for the stock as they were before.

So, faith and expectations can translate into cold hard cash, but only because of something very real: the capacity of a company to create something, whether it is a product people can use or a service people need. The better a company is at creating something, the higher the company's earnings will be and the more faith investors will have in the company.

In a bull market, there is an overall positive perception of the market's ability to keep producing and creating. Because this perception would not exist were it not for some evidence that something is being or will be created, everyone in a bull market can be making money. Of course, the exact opposite can happen in a bear market.

To sum it all up, you can think of the stock market as a huge vehicle for wealth creation and destruction.

Disappearing stocks
No one really knows why socks go into the dryer and never come out, but next time you're wondering where that stock price came from or went to, at least you can chalk it up to market perception.