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Investments are zero or a negative number
Bob S
#1 Posted : Tuesday, May 24, 2011 4:20:47 PM(UTC)
Rank: Newbie

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Joined: 5/22/2011(UTC)
Posts: 1
Location: Newport, OR

When I buy an investment - say at $150 - after purchasing it immediately goes to zero or a minus number - like -26. How's that possible?

It's a cool game but I can't understand it yet.

Joe Poff, CPA
#2 Posted : Tuesday, May 24, 2011 9:33:24 PM(UTC)
Rank: Administration

Groups: Administrators
Joined: 5/20/2011(UTC)
Posts: 3
Location: Auburn, WA

Hi Bob -

Yes, it's working properly ):

What's happening is like the recent LinkedIn IPO. Some people who bought it at issuance for $38 found that they immediately made money when it opened at $80 or so. Someone that bought it at $115 though - by the end of the day - they actually lost money because the value was down to about $85 at the end of the first day. I don't remember the 'exact' numbers - it's more an illustration.

Some of the investments in the game are like this - just as in life. So, your investment apparently tanked at the end of the first day.

Fear not though - as again - in life - these are paper losses until you actually sell it. If you hold onto your investment, and move the time line forward, then it may come back. If you recall years and years ago - Chrysler at $1 and was being written off by everyone, but Lee Iacoca brought it back. The same applies to these investments.

However, sometime, you need to recognize a dog when you see it and get rid of it before it goes down further.

Donald Trump however rode his investments until they were so far down they almost touched China, but he then also rode them back. So, that's the point of the game - to experiment. The investments should give you a touch of real life and a taste for what it's like to ride something down and back up - or out.

Some investments, such as cash buried in your back yard - that really can't go below zero. Likewise, some other investments are the same - you can't lose more than you put in. Other investments, just as in real life - you're on the hook so you can ride that puppy way down below zero. You may end up to where you don't have enough cash to unload it - again - it's just like in real life.

Hope this helps, Bob.
Joe Poff, CPA
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