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Quite simply, every investor would stampede for the exit at the same time.
Think of a highway with everyone trying to exit at the same place at the same time.
"In 1987, everybody tried to go to the exit at the same time, but the exit door wasn't big enough," the longtime trader E.E.
There, at the government office, visitors buy visas and have their passports stamped by none other than Mr. Casley, both for entry and exit at the same time.
The situation can persist for several months and even years, but the unwind is then all the more sudden and vicious as the leveraged positions all head for the exit at the same time.
But assuming an exit at the same multiple of earnings the company traded at before a bid emerged, the annualized returns would still be shy of around 10 percent.
Similar(47)
He continued, "We can't all rush to the exits at the same time".
A person enters and exits at the same point, following one path into the middle and that same path out again.
But fixed rates get countries into financial trouble when, for whatever reason, investors get spooked and all rush for the exits at the same time.
For example, two rays of white light, containing all visible wavelengths of light, entering at the same angle and exiting at the same angle, could take entirely different paths within a droplet.
Bianchi went off at the very quick Dunlop curve in heavy rain and hit the tractor crane recovery vehicle that was removing Adrian Sutil's car from the track after he had exited at the same corner on the previous lap.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com