Light Bulbs, Perception, the Reset Button and a Laugh

So, the stock market is a mess. The financial industry is a mess. The credit industry is a mess. All the experts, naysayers and doomsayers are talking crisis. Funny thing is, it all appears to be perception.

Since my first lesson in finances years ago, (I was in a small private school where a CPA firm that visited was providing classes for us,) I was told that the price of stock doesn't really mean that share of a company is worth that much in dollars. It was only worth what people believed it to be worth.

So, if it was a light bulb company, buying stock, or pieces of a company simply meant that people believed that company was going to keep making light bulbs, because, gee... I was going to keep using light bulbs. So, this stock could be worth a lot of money, because we were going to keep buying light bulbs.

Now, these wise gentlemen explained to us that if someone convinced a bunch of people that the light bulb company couldn't make light bulbs anymore, that everyone would try to get rid of the light bulb companies stock, and noone would buy it, until the company either had no more shares and got booted from the stock exchange or it actually couldn't make light bulbs anymore and so stopped doing business.

So, I laughed, a little when I heard that traders didn't know what to do on Friday. I heard 3rd hand that some just stopped and stared at screens and couldn't figure out what to do. I thought it was a little silly.

Do you know why? I'm not an economist and won't pretend to be, but I know a couple things.

There are over 300,000,000 people in the US.

Guess what? We need stuff.

We need food for our kids. We need cars to get back and forth to work. Some of us need Internet services to work. We need computers and computer desks. We need houses to keep them in, so they don't get destroyed by the weather. We need chairs to sit in, at a home office or work office. Some of us will share germs and will need medicine to help us get rid of them. We need electricity, we need each other.

So, what does all that mean? We all have to figure out how to get stuff. We, as people, as a nation make those companies valuable. We make the stuff they make valuable. We are willing to trade our time, our creativity, our skills, for little green pieces of paper that we can use to buy the stuff to live.

So, some financial guy, a week or two ago, bought large portions of a company that makes light bulbs (among other things). All the pounding and fear aside. Darn it all, he must've known that my light bulb would burn out, and I'm going to have to go get a new one.

Sigh. I wish I was that smart. I would've bought the stock a year ago, cuz I bet we all bought a lot of light bulbs over the past year.

So... what were we afraid of again? Lol, I don't remember.

Excuse me, cause I'm going to need to find my car keys and figure out if I have gas in my car and where are those shoes I bought so my feet wouldn't get cold?