It's certainly make the NZ markets take note.
… and many other overseas markets. And that in itself is weird. I don’t know how many times I’ve heard news reports that the US market is down and that it is expected that the AU market will also be down when markets open in the morning. Okay, the US is having a bad day, but why does that make the other markets also go down? If anything, it should make them go up (where are these people who are moving huge amounts of money moving that money to?).
As far as I can tell, there are no fundamental laws for economics (compared to fundamental laws for physics). Markets are simply ‘valued’ by the last few transactions and that value extrapolated to give the total value of the market. That works okay for relatively small transactions, but it doesn’t actually equate to the real value of the market. For example, we could say a VE ute is worth $40,000 because one recently sold for that amount. But if every VE ute owner decided to sell at the same time, they’d be valued at next to nothing. Same car, different ‘markets’ and way different values.
Markets are much the same. For some reason (a very wealthy) someone gets spooked and sells a truck load of stock (maybe they just want to buy a new super yacht?). Selling naturally depresses the price at bit. If other stock owners take this as an omen and also decide to sell this can cause as a run or collapse of that stock. The weird thing is that the company that is being sold up is probably doing exactly what they were previously doing, and everyone who works there are probably doing exactly the same work, and producing the same whatever they produce - nothing has changed, but it’s value of the company on the market.
