Are You Trading or Gambling? • Hacker News Board

Re: Are You Trading or Gambling?

#241

Post by IgorPartola » Sat, Feb 27, 2021, 5:22 PM UTC

JMTQp8lwXL wrote: post #231

phone8675309 wrote: post #181

Earlier quoted context omitted.

Digital tulips, only tulip farming didn't consume the same amount of electricity as a small, South American country every year.

Things only have value because we agree they do. The US Dollar is backed by the full faith and trust in the government. "Faith and trust" is as much a digital tulip.

I find that to be a somewhat reductionist view. First, some things have a fundamental energy cost. Food is one example. You can’t value food for free even if we agree to, because it takes kWhs to produce it and they have to come from somewhere. I guess you could say your life isn’t worth the cost of the food to sustain it and stop eating it, but not many will do that.

Second, you have natural scarcity: truffles are not commonly available. How much you want to eat them may put a ceiling on the price, but again there is also a floor below which no amount of energy would bring you more truffles.

Re: Are You Trading or Gambling?

#242

Post by BelenusMordred » Sat, Feb 27, 2021, 5:23 PM UTC

vermilingua wrote: post #150

BelenusMordred wrote: post #144

Earlier quoted context omitted.

You forgot no share dilution in this offtopic tangent. Every stock out there can double their issuance if they want to.

As can bitcoin, and it would only take a soft fork.

There's a soft fork coming up for taproot requiring a super-consensus of 90% miners. It will likely go through and still be bitcoin afterwards. Thinking you might not understand the difference between the various types of forks the protocol can undergo.

https://taprootactivation.com/

Re: Are You Trading or Gambling?

#243

Post by Balgair » Sat, Feb 27, 2021, 5:26 PM UTC

JMTQp8lwXL wrote: post #231

phone8675309 wrote: post #181

Earlier quoted context omitted.

Digital tulips, only tulip farming didn't consume the same amount of electricity as a small, South American country every year.

Things only have value because we agree they do. The US Dollar is backed by the full faith and trust in the government. "Faith and trust" is as much a digital tulip.

Sure, but its also backed by a few aircraft carriers, ICBMs, ~ 1.3 million warfighters, and a few other things ;)

Re: Are You Trading or Gambling?

#244

Post by IgorPartola » Sat, Feb 27, 2021, 5:27 PM UTC

paulgb wrote: post #173

olalonde wrote: post #171

Earlier quoted context omitted.

Wait until you hear about US dollars.

There are many differences between the two, but one of the more obvious ones is that nobody is running around claiming that US dollars are a good investment.

I lived in Ukraine during a period of like 1000% inflation period month. At the time USD was the value store or choice. You get paid on the 1st of the month and if you don’t turn that cash into USD, by the end of the month it became almost worthless. Nobody could pay with USD (except the bribes), but you wanted to minimize the time you held Ukrainian currency as much as possible, down to hours if you could.

Re: Are You Trading or Gambling?

#245

Post by chrisgd » Sat, Feb 27, 2021, 5:31 PM UTC

gandalfian wrote: post #119

chrisgd wrote: post #80

Earlier quoted context omitted.

But there is a buyer and seller in the transaction regardless of whether one person is gambling or investing.

You buy a share, it goes up. You sell it to me. Share goes up more. We have both won. How? Because the company created more stuff and injected it into the equation. We can literally get more out than we put in.

Me buying a share from you has no impact on the company. They only benefit if they can sell primary shares. A company’s ability to monetize a rising stock price is time consuming, you can’t decide tomorrow to issue $100m worth of shares and be able to sell them

Re: Are You Trading or Gambling?

#246

Post by auc » Sat, Feb 27, 2021, 5:31 PM UTC

BelenusMordred wrote: post #144

nikanj wrote: post #127

Earlier quoted context omitted.

And thus, bitcoin. A stock that's guaranteed to provide no dividends, do no buy-backs, or deliver any value - aside from the ability to sell it to the next fool for an even greater value.

You forgot no share dilution in this offtopic tangent. Every stock out there can double their issuance if they want to.

Yeah, but if they did this, they would be raising cash to deploy. Presumably in an attempt to grow their business and create actual value.

Re: Are You Trading or Gambling?

#247

Post by chrisgd » Sat, Feb 27, 2021, 5:32 PM UTC

JacobSuperslav wrote: post #213

chrisgd wrote: post #79

Doesn’t matter, as long as you are making money.

the point is most gamblers aren't

There is no way to prove that. For every story of someone who lost $50k there are multiple ppl posting that they made $50k

Re: Are You Trading or Gambling?

#248

Post by chrisgd » Sat, Feb 27, 2021, 5:32 PM UTC

tekkk wrote: post #95

chrisgd wrote: post #80

Earlier quoted context omitted.

But there is a buyer and seller in the transaction regardless of whether one person is gambling or investing.

True, but when a company sells their stock in for example IPO, it is a mutual goal of yours and theirs to see that the company rises in value.

Maybe. Or to buy at 19 and sell the next day at 24

Re: Are You Trading or Gambling?

#249

Post by nightski » Sat, Feb 27, 2021, 5:33 PM UTC

Why is this such an interesting distinction to people? They act like by not trading you are not gambling. But at the end of the day any investment is about realizing opportunity cost. There is an opportunity cost to holding fiat/cash as well. So in a way you could argue that holding cash is gambling that the fiat/cash is going to provide a better opportunity cost than other investments.

What's more interesting to me is focusing on optimizing opportunity cost (which is always a gamble at the end of the day, it's impossible to NOT gamble).

Re: Are You Trading or Gambling?

#250

Post by mancerayder » Sat, Feb 27, 2021, 5:34 PM UTC

criticaljudge wrote: post #53

TeMPOraL wrote: post #36

Earlier quoted context omitted.

> But I also don’t see that fundamental value ever matching the market value(...). We aren’t trading shares in a specific company here. We are trading Melvin’a profits and/or losses. I think you're still doing L1/L2 thinking. The way I understand L3, there's no such thing as "fundamental value". There's only market value, that's determined by what people think the market value is. The extent to which it's correlated…

But it is obviously bullshit, as the real companies behind some stocks have a real value. Like for example they might own a building that is worth one billion dollars (simple example). If you take away all the stock market shenanigans, you still own part of that building via your stocks. As for the usefulness question: providing liquidity is useful. If an investor considers investing in some project, it helps his dec…

>But it is obviously bullshit, as the real companies behind some stocks have a real value. Like for example they might own a building that is worth one billion dollars (simple example). If you take away all the stock market shenanigans, you still own part of that building via your stocks.

But as a stock holder even of a public company, your shares can get diluted to smithereens when they issue new shares to raise money.

For a laugh check out the chart of Helios and Matheson, the MoviePass company that had a fly by night stock spotlight experience a couple of years ago. It's so diluted, the historical price looks like the stock was worth bazillions in the past chart numbers.