Paper Losses?

I’m sorry, i’m trying to understand but my ‘everyday business’ mind just can’t rationalise the ‘Ithey’re paper losses; don’t worry about it’ school of thought. Here’s why…

in business you have assets, liabilities, revenue and expenditure

All that money that just got lost was an asset; unrealised but an asset none-the-less.  In my line of work it is equivalent to my property value, unrealised but my asset and what I borrow against.

Couple this with a decrease in revenue, increasing expenditure, and any business is in the shit.  Everyday New Zealanders cannot go to their bank managers and say, “Sorry Sir but the loss in valuation of our asset is just a paper loss, we know we also have decreasing income, and well, our expenditure hasn’t waned; but it’s only a paper loss you understand”

Yee gads, you’d end up under the guidance of your friendly Wellington based bank manager – or worse.

Also isn’t there the principle of selling on a high and buying on a low…why keep some of those assets in the current climate.  I don’t expect that the financial managers would get the last 5% but hell’s teeth; use your common sense.

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