I’ve been thinking a bit about the recent United Air Line stock crash. Is it really a bad thing, though? In fact, is it something we should work hard to duplicate?
That might be going a little too far. Obviously, a lot of people unexpectedly lost a lot of money a little too fast, mostly due to computer errors.
But think about it — United Airlines went from $13 a share to $3 a share and back up to $11 a share, once all was sorted out.
Isn’t it possible that the stock was overvalued at $13 a share, then? If the market rules, then isn’t the stock currently at its true level? And isn’t that best for the economy, for investors, for everyone?
Why not zero out the rest of the stock market? Let’s reset all stocks to $0 and let the market dictate their new prices. Where would Google wind up if people had to start buying it again and bidding the price up as it went along? What if the stock market wasn’t all lottery tickets and hype marketing?
The Dow Jones Industrial Average is an arbitrary number, composed of an arbitrary number of arbitrary companies. Being above 10,000 is meaningless, except in the psyches of small people. So let’s start with the DJIA and zero out all their stocks.
Problem is, it wouldn’t work on this scale. Someone would develop a computer algorithm and all the stocks would return to their pre-zeroed value.
Still, it’s a fun kind of crazy talk.