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A buyer requires a seller there can be no “sidelines

For every buyer, there must be someone willing to sell. As noted by Clifford Asness:

“There are no sidelines. Those saying this seem to envision a seller of stocks moving money to cash and awaiting a chance to return. But they always ignore that this seller sold to somebody, who presumably moved a precisely equal amount of cash off the sidelines.”

Every transaction in the market requires both a buyer and a seller, with the only differentiating factor being at what price the transaction occurs. Since this is necessary for there to be equilibrium in the markets, there can be no “sidelines.” 

MarketWatch 5 January 2021


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