This argument misses the fact that some of the sellers in the market are selling because of other circumstances in their life or business. This doesn’t affect the price on average, but it does make it unreasonable to say “you need to buy them from someone who’s willing to sell at that price—who presumably does not agree that the price is going to go way up.”
At any point in time, some of the sellers in the market are selling because their daughter is about to start college, or they are nearing retirement, or there’s some other valuable they want to invest in with somewhat better prospects, and they need financial liquidity to do so. Similarly, there are buyers who just sold an asset (real estate, e.g., that finished construction) or received a bonus, or sold something else to protect their gains and need to get back into the market.
The point isn’t that these behaviors move the price in one direction or another, it’s just that not all activity in the financial markets is driven by disagreements about prices.
This argument misses the fact that some of the sellers in the market are selling because of other circumstances in their life or business. This doesn’t affect the price on average, but it does make it unreasonable to say “you need to buy them from someone who’s willing to sell at that price—who presumably does not agree that the price is going to go way up.”
At any point in time, some of the sellers in the market are selling because their daughter is about to start college, or they are nearing retirement, or there’s some other valuable they want to invest in with somewhat better prospects, and they need financial liquidity to do so. Similarly, there are buyers who just sold an asset (real estate, e.g., that finished construction) or received a bonus, or sold something else to protect their gains and need to get back into the market.
The point isn’t that these behaviors move the price in one direction or another, it’s just that not all activity in the financial markets is driven by disagreements about prices.