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Dow, wow

eohrnberger said:
"Petroleum has value because it's useful" True.
"the supply is finite" also true
"Petroleum can't be made artificially" well, it can be made 'artificially:

Synthetic fuel - Wikipedia
en.wikipedia.org › wiki › Synthetic_fuel
Jump to Oil sand and oil shale processes - Speight included liquid and gaseous fuels as well as clean solid fuels produced by conversion of coal, oil ...‎Synthetic Fuels Corporation · ‎Category:Synthetic fuels · ‎Fischer–Tropsch process

Synthetic oil - Wikipedia
en.wikipedia.org › wiki › Synthetic_oil
Synthetic oil is a lubricant consisting of chemical compounds that are artificially made. Synthetic lubricants can be manufactured using chemically modified ...‎Types · ‎Full

Synthetic fuels in the United States - Wikipedia
en.wikipedia.org › wiki › Synthetic_fuels_in_the_United_States
Synthetic fuels in the United States is an issue of rising importance due the crude oil prices, and geopolitical and economic considerations.‎History · ‎Coal reserves · ‎Economic viability · ‎Initial consumers

Synthetic crude - Wikipedia
en.wikipedia.org › wiki › Synthetic_crude
Synthetic crude is the output from a bitumen/extra heavy oil upgrader facility used in connection with oil sand production. It may also refer to shale oil, an output ...
​

whether this is economically viable wasn't the question.

"Gold isn't all that useful" Not true. Gold is used in many of the circuit boards, CPUs, memory, etc. etc. And also for heat protection / heat dissipation.



As a contrast, how valuable is sand? It isn't. So not only is gold valuable as a material for creating electronics, it is also rare, both drive its price higher.
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Ok well, I think you know what I meant.

Gold's main value doesn't come from its usefulness. And it was valued long before there were electronics. It's shiny and doesn't react with anything, and can be made into jewelry and other beautiful objects.

I think you get what I meant, no need to pick on the details.

Sand is actually very useful, because it can be made into glass, concrete, etc. But it's plentiful, so it's cheap. Same with air -- extremely useful, but so plentiful it's free.

It's all supply and demand. If people want (demand) something, for whatever reason, and the supply is limited, it has high value (price).

It isn't all faith, or shouldn't be. However, that is now the case with money, and also with stocks.
 
Good4Nothin said:
We are in the midst of, possibly, the worst economic crisis ever. And yet the DOW has been shooting up for a couple of days. Do you wonder WHY?

Maybe the massive bailouts of big companies and Wall Street banks, and the infinite magic money injected by the Fed. Allowing these companies to buy back their own stock.

This doesn't help the economy. It just sets us up for even worse crises in the future.
Click to expand...

The economic numbers showed the country to be in its best condition in 50+ years prior to the COVID 19 virus outbreak, it has slipped but is not in terrible shape compared to prior to Trumps election. The real problem is the shutdown of business and laying off workers due to a medical emergency that is creating an economic issue. Still we are better off than 2008 so far. How long before we get back to work is the question.
 
Good4Nothin said:
Ok well, I think you know what I meant.

Gold's main value doesn't come from its usefulness. And it was valued long before there were electronics. It's shiny and doesn't react with anything, and can be made into jewelry and other beautiful objects.

I think you get what I meant, no need to pick on the details.

Sand is actually very useful, because it can be made into glass, concrete, etc. But it's plentiful, so it's cheap. Same with air -- extremely useful, but so plentiful it's free.

It's all supply and demand. If people want (demand) something, for whatever reason, and the supply is limited, it has high value (price).
Click to expand...

I guess we can agree that supply, demand and scarcity being the primary factors in the market pricing most anything. That something is useful or beautiful is what drives their demand.

It isn't all faith, or shouldn't be. However, that is now the case with money, and also with stocks.
Click to expand...

Both money and stocks have markets, and those markets are driven by pretty much the same factors as any market.
 
Good4Nothin said:
When it's detached from business, then it is a Ponzi scheme.
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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.
 
Good4Nothin said:
We are in the midst of, possibly, the worst economic crisis ever. And yet the DOW has been shooting up for a couple of days. Do you wonder WHY?

Maybe the massive bailouts of big companies and Wall Street banks, and the infinite magic money injected by the Fed. Allowing these companies to buy back their own stock.

This doesn't help the economy. It just sets us up for even worse crises in the future.
Click to expand...

The Dow kind of tanked late yesterday when investors realized Trump was blowing smoke up their ass again. 2000 new deaths is the opposite of what he has been saying over the past two days.
 
Good4Nothin said:
We are in the midst of, possibly, the worst economic crisis ever.
Click to expand...
This is simple alarmism.

And yet the DOW has been shooting up for a couple of days. Do you wonder WHY? Maybe the massive bailouts of big companies and Wall Street banks, and the infinite magic money injected by the Fed. Allowing these companies to buy back their own stock. This doesn't help the economy. It just sets us up for even worse crises in the future.
Click to expand...
There is no doubt sectors of the economy are taking a big hit, but the underlying economy was sound and the sectors taking a hit are also developing a backlog of demand. It's a question of when and how the demand is released.

calamity said:
The Dow kind of tanked late yesterday when investors realized Trump was blowing smoke up their ass again. 2000 new deaths is the opposite of what he has been saying over the past two days.
Click to expand...
Profit taking. The COVID crisis is becoming the COVID scare. In the aftermath and clean up, the question will be not if we over-reacted, but how much?
 
Jay59 said:
This is simple alarmism.


There is no doubt sectors of the economy are taking a big hit, but the underlying economy was sound and the sectors taking a hit are also developing a backlog of demand. It's a question of when and how the demand is released.


Profit taking. The COVID crisis is becoming the COVID scare. In the aftermath and clean up, the question will be not if we over-reacted, but how much?
Click to expand...

If it's just a scare, feel free to start licking handrails. Let us know how that goes.
 
Good4Nothin said:
We are in the midst of, possibly, the worst economic crisis ever. And yet the DOW has been shooting up for a couple of days. Do you wonder WHY?

Maybe the massive bailouts of big companies and Wall Street banks, and the infinite magic money injected by the Fed. Allowing these companies to buy back their own stock.

This doesn't help the economy. It just sets us up for even worse crises in the future.
Click to expand...

please tell us which companies bought back their own stock over the last few weeks, much less the last few days

we will wait
 
Good4Nothin said:
When it's detached from business, then it is a Ponzi scheme.
Click to expand...

tell me a particular stock...and lets break it down

lets see if WE can figure out why MR MARKET has determined the price for today

tell me what stock you believe is completely OVER PRICED....i may agree, i may not

and remember....people like me dont buy based on TODAYS business....we buy based on what may happen at the end of the year, or even next year....
 
Good4Nothin said:
No. Petroleum has value because it's useful, and the supply is finite. Petroleum can't be made artificially, and neither can gold. Gold isn't all that useful, but it is beautiful and lasts forever.

When people value things, it's always for a reason.
Click to expand...

Right because someone finds that it has value.
If someone doesn't think it is valuable then it doesn't have value.

right now there is a flood of oil on the market. so guess what it isn't as valuable as it was.

gold only has value because someone thinks it does.
 
eohrnberger said:
I guess we can agree that supply, demand and scarcity being the primary factors in the market pricing most anything. That something is useful or beautiful is what drives their demand.



Both money and stocks have markets, and those markets are driven by pretty much the same factors as any market.
Click to expand...

Money and stocks are useful, because they can be exchanged for goods. But money and stocks no longer have any scarcity. The Fed can generate all the money it wants, and companies can print all the stocks they want. Since companies don't usually pay dividends anymore, their stocks are not backed by anything. Supply (limit) is no longer a factor.

The value of stocks and of money now depend mostly on demand. Demand without supply limits means no real value.
 
Gaius46 said:
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.
Click to expand...

Stocks used to pay dividends, but now most don't. The value of stocks was tied to the performance and profits of businesses.

Now the value of stocks, usually, depends entirely on what you can sell it for. In other words, their value depends on new investors paying more than what you paid. That is EXACTLY what is meant by a Ponzi scheme. Go look it up.
 
ludin said:
Right because someone finds that it has value.
If someone doesn't think it is valuable then it doesn't have value.

right now there is a flood of oil on the market. so guess what it isn't as valuable as it was.

gold only has value because someone thinks it does.
Click to expand...

What someone thinks is based on something.
 
Good4Nothin said:
What someone thinks is based on something.
Click to expand...

opinion is highly subjective.

you might think your old chair is valuable i don't.
something is worth what someone else is willing to pay.
 
ludin said:
opinion is highly subjective.

you might think your old chair is valuable i don't.
something is worth what someone else is willing to pay.
Click to expand...

Well yeah, and overall there are good reasons. I probably won't get rich selling my old chair. There are REASONS why the society as a whole values certain things.

You are trying to argue that it's all subjective beliefs. And that has become true as far as our money and stocks. But that is very bad, because only DEMAND is considered now, and supply is unlimited. That can't be good! Economies depend on both SUPPLY AND DEMAND!!
 
ludin said:
Actually i understand it very well which is why it isn't a ponzi scheme.
Click to expand...

Maybe you understand it very well, but your understanding is all wrong.
 
Good4Nothin said:
Well yeah, and overall there are good reasons. I probably won't get rich selling my old chair. There are REASONS why the society as a whole values certain things.

You are trying to argue that it's all subjective beliefs. And that has become true as far as our money and stocks. But that is very bad, because only DEMAND is considered now, and supply is unlimited. That can't be good! Economies depend on both SUPPLY AND DEMAND!!
Click to expand...

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.
 
Good4Nothin said:
Maybe you understand it very well, but your understanding is all wrong.
Click to expand...

this is an I say so fallacy. if you don't have an argument then say so.
You said it was a ponzi scheme prove it.

PS ponzi schemes are illegal.
 
Good4Nothin said:
Stocks used to pay dividends, but now most don't. The value of stocks was tied to the performance and profits of businesses.

Now the value of stocks, usually, depends entirely on what you can sell it for. In other words, their value depends on new investors paying more than what you paid. That is EXACTLY what is meant by a Ponzi scheme. Go look it up.
Click to expand...

Wrong.

From Wikipedia

“A Ponzi scheme (/ˈpɒnzi/, Italian: [ˈpontsi]; also a Ponzi game)[1] is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.[2] The scheme leads victims to believe that profits are coming from product sales or other means, and they remain unaware that other investors are the source of funds. A Ponzi scheme can maintain the illusion of a sustainable business as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own.”

A Ponzi scheme is a form of fraud. Who is being defrauded here and who is doing the defrauding?

A Ponzi scheme would require that the company itself use money from new investors to pay off older investors. That is not happening here.

A Ponzi scheme is based on ownership of a non existent asset. Last time I looked GM actually does exist.

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.

What is happening is people are buying and selling stocks on the open market and the market is determining the price based, in part, on expectations. That is not a Ponzi scheme.
 
ludin said:
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.
Click to expand...

You don't understand the concept of price discovery, and how it is related to supply and demand.
 
Gaius46 said:
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.
Click to expand...

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.
 
Good4Nothin said:
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.
Click to expand...
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...?
 
Good4Nothin said:
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.
Click to expand...



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? That’s not a bad thing and it’s not divorced from the business. The money raised becomes an asset on the company’s 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.
 
Gaius46 said:
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.
Click to expand...

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.
 
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