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Old July 15, 2013, 11:20 PM   #2
JohnKSa
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Join Date: February 12, 2001
Location: DFW Area
Posts: 18,290
Quote:
There are lots of people with money.
Some years ago I made the acquaintance of a man who buys "as is" houses, cleans them up and then resells them as a business.

His primary rule when purchasing a house was to insure that it would sell, after rennovation, for a price that was below a certain threshold he had calculated by watching the market. At the time, his threshold was $80K. The rationale was that if he went over that mark, it became more difficult (and took longer) to sell the houses because the potential number of buyers was reduced too much. In other words, the house might be worth more, but that additional worth actually made it harder to sell because there were too few potential buyers to allow a reasonably rapid and easy sale.

Same thing applies here, but to a much larger extent. Sure, there are people out there with enough money so that buying a machinegun for the price of a new car or another house isn't an issue for them, but the higher the price gets, the more the number of potential buyers shrinks. That means, ultimately, that selling becomes more and more difficult as the price goes up.

At some extreme point, when your M16 is "worth" eleventy-one billion and the 3 buyers out there who can actually afford to pay that much for a toy already have 235 M16s each and don't want any more then there's a dilemma. You're either stuck with your eleventy-one billion dollar gun, or you can decide it's REALLY worth a lot less than eleventy-one billion, thus increasing the number of buyers to the level at which a sale is possible.
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