Question: At the stock exchange, every time someone sells stock, someone else is buying it. Last fall, when the Dow dropped from 16,000 to 8,000, mutual funds, retirement funds, insurance companies, etc. were selling. Who was buying? Who owns all the corporations now?
Paul Solman: Other mutual funds, retirement funds, insurance companies. Sovereign wealth funds abroad. My friend Marty, who thought the market had bottomed at 8,000. Millions of people like my friend Marty, here and overseas.
It isn’t as if Dr. Evil (or Dr. No, on whom Mike Myers based his arch-villain) now owns corporate America. A 6000-point loss on the Dow (it never reached 15,000, BTW, much less 16k), represents trillions of dollars that simply vanished, in the same way housing wealth vanished as folks suddenly said: “Wait a second. That house isn’t worth [fill in the blank]!” And poof, it WASN’T. Same for the value of America’s companies.
So the answer is: Pretty much the same folks own the stock in America who owned it before. It’s just that what they own is now worth about half what it was quite recently.