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Thread: Dow, wow

  1. #71
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    Re: Dow, wow

    Quote Originally Posted by ludin View Post
    It is subjective. If you think your widgets are worth 50 bucks and i don't then i am not paying 50 bucks for your widgets.
    simple as that. you might find people that are willing to pay it but that is their opinion that they are worth 50 bucks.

    don't believe me go watch an episode of shark tank.

    People walk in there all the time asking stupid money for their concepts.
    some times the sharks will over more most of the time they offer less.

    the people decline offers because they don't agree.
    the fact is based on opinion.
    You don't understand the concept of price discovery, and how it is related to supply and demand.

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    Re: Dow, wow

    Quote Originally Posted by Gaius46 View Post
    In a Ponzi scheme the falls apart if there are no new investors. That is not the case there. If no one wants to buy your stock you still own it and it still has some value.
    No, if no one wants to buy my stock it has no value. The value of stocks, if they don't pay dividends, is determined by what new investors want to pay. It is unrelated to the performance of the business.

    A typical pyramid scheme is where the early investors make money by bringing in new investors. There is a product, but you don't make a lot just by selling the product. You make a lot by getting new investors.

    Same as the stock market. Most people don't see it that way, because traditionally stocks generated income resulting from profits made by the business. Now, usually, the business prints up as many stocks as it wants, sells them, and there is no more connection between the stock and the business.

    Very similar to any pyramid business you can think of.

  3. #73
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    Re: Dow, wow

    Quote Originally Posted by Good4Nothin View Post
    No, if no one wants to buy my stock it has no value. The value of stocks, if they don't pay dividends, is determined by what new investors want to pay. It is unrelated to the performance of the business.

    A typical pyramid scheme is where the early investors make money by bringing in new investors. There is a product, but you don't make a lot just by selling the product. You make a lot by getting new investors.

    Same as the stock market. Most people don't see it that way, because traditionally stocks generated income resulting from profits made by the business. Now, usually, the business prints up as many stocks as it wants, sells them, and there is no more connection between the stock and the business.

    Very similar to any pyramid business you can think of.
    Egads... No, it isn't.

    Pyramid schemes are fake. There is typically no actual product. The schemer collects money from rounds of victims, and typically provides nothing in return. Sometimes the schemer will use the fraudulently acquired funds to pay back earlier investors; those investors can only get out if the schemer can't figure out how to keep them in. Left to their own devices, pyramid schemes collapse under their own weight, as the schemer is ultimately unable to recruit enough new victims to keep it going.

    The stock market is a way of trading a quasi-ownership stake in a corporation. It's not a scam, it's just a repository for capital. Shareholders can buy and sell at will. When a corporation issues more stock, it almost always has a direct effect on the stock price. When the business is expected to do well, the stock price rises; when it is not expected to do well, the price falls. Executives are often paid in stock options.

    It's true that stock prices are based a great deal on perception and expectations, rather than a mathematical formula derived from the company's profits; and some people who invest in the market are little more than gamblers, who are trying (and almost always failing) to beat the market, but yes stock prices are generally linked to the perception of the future health of the corporation.

    Now do you know why I don't have any interest in reading the crackpot websites you've been reading...?
    "Everyone should listen to me all the time about everything." - Rosa Diaz

    "I donít take responsibility at all." - Donald Trump

  4. #74
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    Re: Dow, wow

    Quote Originally Posted by Good4Nothin View Post
    No, if no one wants to buy my stock it has no value. The value of stocks, if they don't pay dividends, is determined by what new investors want to pay. It is unrelated to the performance of the business.

    A typical pyramid scheme is where the early investors make money by bringing in new investors. There is a product, but you don't make a lot just by selling the product. You make a lot by getting new investors.

    Same as the stock market. Most people don't see it that way, because traditionally stocks generated income resulting from profits made by the business. Now, usually, the business prints up as many stocks as it wants, sells them, and there is no more connection between the stock and the business.

    Very similar to any pyramid business you can think of.


    There are a number of liquid markets like the NYSE where someone is always willing to buy your stock. It just may not be at a price that you like.

    Stock represents an ownership stake in the company. Even if no one wants to buy your shares they still represent - at a minimum - ownership in a share of the organizations assets.

    So a company issues more stock? Thatís not a bad thing and itís not divorced from the business. The money raised becomes an asset on the companyís books and if used well makes the company more successful.

    And btw from what I can gather about half of all companies currently pay some form of dividend from what I can see.
    Don't be a grammar nazi - Marcus Aurelius, Meditations, Book 1 #7

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    Re: Dow, wow

    Quote Originally Posted by Gaius46 View Post
    First point - you clearly have no idea what a Ponzi scheme actually is. I suggest you look it up - Wikipedia has a decent article in it.

    The market is not a Ponzi scheme plain and simple. There are certainly ways companies can defraud investors but none of them are Ponzi schemes. It would be pretty much impossible for any company traded on a major public exchange to perpetrate a Ponzi scheme on investors.

    How is the market “detached from business”?
    Again you don’t seem to understand that investors don’t invest in stocks based on what the company is doing today. They invest based on what they expect the company’s performance is going to be in the future.

    There’s nothing at all stupid about buying the right stocks right now. Some people are fleeing the market and turning mere paper losses into real ones. That’s stupid on many cases. The economy will rebound and fundamentally sound companies will make money and their stock prices will rise.
    Excellent description of how and why the market works. Not too sure if certain posters will accept these facts, because it doesn't fill their narrative that free markets and capitalism are the cause of all the problems in the world. Again, an excellent description of what most of the real world understand. Thank God I started investing money in a small batch of quality companies back in the mid 80's. Nothing major money wise, just a few hundreds here, a few hundred dollars there, a few times a year, but it sure did grow. No way could have any bank returns match what accumulated in my stock accounts! The increased in their value has enabled my retirement since 2012 be a very comfortable life. Has the value of them decreased, yes, but since I didn't sell I haven't lost a penny. The stock market has always returned to where it once was. The market has moved up and down many time since I opened an account. It may take 12-36 months but it will be higher than what is was 45 days ago. I just wish I had the money the government collected from my employer and me to invest too.
    Last edited by Tryagain; 04-08-20 at 03:42 PM.

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    Re: Dow, wow

    Quote Originally Posted by Linc View Post
    Big Pharma stocks that make Hydroxychloroquine are certainly on the rise. Trump, Wilbur Ross and GOP groups are invested in those companies that make HCQ, such as Sanofi.
    I would like to read this.

    Do you have a link to share?

    ...Never mind I found it.

    Trump has very small financial tie to hydroxychloroquine producer - Business Insider

    "Trump has a distant financial link to a pharma giant that makes the drug he's been pushing to fight COVID-19 — but it's probably worth less than $1,000"

    WOW, a whole $1000.00


    https://www.washingtonpost.com/polit...s-not-profits/

    In other words, Trump’s stake in Sanofi from each trust is between $33 and $495 — or between about $100 and $1,500 in total.
    Last edited by Tryagain; 04-08-20 at 03:44 PM.

  7. #77
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    Re: Dow, wow

    Quote Originally Posted by Visbek View Post
    Egads... No, it isn't.

    Pyramid schemes are fake. There is typically no actual product. The schemer collects money from rounds of victims, and typically provides nothing in return. Sometimes the schemer will use the fraudulently acquired funds to pay back earlier investors; those investors can only get out if the schemer can't figure out how to keep them in. Left to their own devices, pyramid schemes collapse under their own weight, as the schemer is ultimately unable to recruit enough new victims to keep it going.

    The stock market is a way of trading a quasi-ownership stake in a corporation. It's not a scam, it's just a repository for capital. Shareholders can buy and sell at will. When a corporation issues more stock, it almost always has a direct effect on the stock price. When the business is expected to do well, the stock price rises; when it is not expected to do well, the price falls. Executives are often paid in stock options.

    It's true that stock prices are based a great deal on perception and expectations, rather than a mathematical formula derived from the company's profits; and some people who invest in the market are little more than gamblers, who are trying (and almost always failing) to beat the market, but yes stock prices are generally linked to the perception of the future health of the corporation.

    Now do you know why I don't have any interest in reading the crackpot websites you've been reading...?
    You think Motley Fool is a crackpot website??

    "I have to agree that some stocks are Ponzi schemes, or at least, investors are buying into the future potential of companies that haven’t yet materialized. Stocks that pay regular dividends are thus less of a Ponzi scheme."

    Is the Stock Market a Ponzi Scheme? - The Motley Fool Canada

  8. #78
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    Re: Dow, wow

    Quote Originally Posted by Good4Nothin View Post
    You don't understand the concept of price discovery, and how it is related to supply and demand.
    you simply don't understand the concept at all. I am still waiting for you to tell me how the stock market is a ponzi scheme.

    The fact is something is only worth anything is something is willing to buy it.
    the value of said thing is only worth what someone is willing to pay.
    facts don't care about your feelings.

  9. #79
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    Re: Dow, wow

    Quote Originally Posted by ludin View Post
    you simply don't understand the concept at all. I am still waiting for you to tell me how the stock market is a ponzi scheme.

    The fact is something is only worth anything is something is willing to buy it.
    the value of said thing is only worth what someone is willing to pay.
    I have explained it and I just posted a link.

    You don't understand basic economics.

  10. #80
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    Re: Dow, wow

    Quote Originally Posted by Good4Nothin View Post
    You think Motley Fool is a crackpot website??

    "I have to agree that some stocks are Ponzi schemes, or at least, investors are buying into the future potential of companies that havenít yet materialized. Stocks that pay regular dividends are thus less of a Ponzi scheme."

    Is the Stock Market a Ponzi Scheme? - The Motley Fool Canada
    Sheís right that investors are buying in future potential. Duh. Thatís the frigging point.

    She and the author she references at the beginning of the piece are wrong to call it a Ponzi scheme for all the reasons Iíve previously outlined. The fact that she wrote a piece for the motley fool is meaningless.
    Don't be a grammar nazi - Marcus Aurelius, Meditations, Book 1 #7

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