131–140 of 233 posts
Anyone who thinks they're "joining forces" to trade stocks is just the mark for a pump and dump. There is no honor among thieves.
Earlier quoted context omitted.
There's nothing really wrong with stock buybacks. They're just a tax efficient method for companies without strong growth opportunities to return value to shareholders.
I think part the above person's complaint may stem from what happened a few years ago, which is that a decent number of businesses had their taxes reduced and simply used the extra money to do stock buybacks instead of improve or expand the company, increase pay, etc. Now that said, stock buybacks on their own are not necessarily a "bad" thing, and if a company has no uses for a bunch of cash on hand then giving it t…
And so you delve into a subjective area. Part of me feels that there is a literal 'passing of the buck' where the company sort of dilutes and distributes sort of, societal investment responsibility, which is where even my own philosophy solicits an internal eyeroll.
The problem I have with buybacks is that I agree it is frequently a signal that 'a company has no uses for a bunch of cash on hand'. But does society suffer when businesses are so wed to capital efficiency? Does society benefit from corporate investment, period? Are earnest investments beneficial to society even if they don't work out?
Basically, how does the money distributed from buybacks impact society, and could that be improved?
Money printing and the Cantillion effects associated with it have created asymmetric playing fields which are fundamentally unfair. The injustice of modern markets can be explained with an analogy: Imagine that you don't have much money and you open a coffee shop; assume that it's your only stream of income... Now imagine that a few years later, a multi-millionaire opens up a coffee shop right next to yours as a pass…
The problem has nothing to do with capitalism. The problem is with money, which is created from thin air and distributed to the rich and powerful, and to those who defend this unfair system.
Why are they blaming capitalism? It's just dishonesty and corruption, which happens under any system if it's not kept in check. It's actually more likely to happen under socialist or authoritarian regimes, when power is more centralized.
What I don't see presented is any evidence for your claims, just a random set of "these guys are even worse so my not quite so please stop criticizing the problems with my bad choice"... it's not a counter, it's deflection.
Earlier quoted context omitted.
>Don't fall for it. It's just rich people and politicians taking money from less rich people. How do rich people make money in the stock market if it's a "scam?" And how do politicians use the stock market to take money from anyone? (usually they use taxes to do this) What about index funds, which usually have proven returns and require no special knowledge?
My naive answers: > And how do politicians use the stock market to take money from anyone? Insider knowledge. > How do rich people make money in the stock market if it's a "scam?" They have an army of traders and their job is to buy and sell non stop, taking advantage of smaller players who think the game is fair, until a profit appears. > What about index funds, which usually have proven returns and require no speci…
There's actually been a bunch of articles over the last year or two talking about how the large number of passive investors in index funds is causing an issue for price discovery of individual stocks.
And everyone doesn't do it because some people are ok with taking more risk for more return.
Earlier quoted context omitted.
> as corporate livestock you add negative value to society (you're now a cog in the money laundering machine) but you're getting paid more than what you did when you were adding value to society. Can you explain this bit more? Why are you adding negative value?
Let's take two examples. First Pepsi Vs Coke. Both Pepsi and Coke make a product that takes no more than 10 cents to create, ship, and put into stores. And yet their prices are many times more than that. Capitalism says that a perfectly free market will eventually reach a point to where there are no profits. Why is it that in a very mature field such as soda, there is still massive profits? In order to get where they…
> First Pepsi Vs Coke. Both Pepsi and Coke make a product that takes no more than 10 cents to create, ship, and put into stores.
I’m sorry this is so patently false on it’s face that the rest of your argument doesn’t make any sense. It also fundamentally misunderstands how a market works and especially what the current system is.
The 2nd example is a little better but also just fails the sniff test, where I live right now, taxis are battling Uber/Lyft exactly because there were real pain points with taxis and the old system (that btw was also a monopoly, only blessed by the gov) that weren’t being addressed and the taxi companies in my city got their act together and decided to compete instead of attempting to hold us hostage to a broken gov-enforced monopoly system.
I also don’t think you really explained how it’s negative value, unless you’re simply making a personal subjective value judgement. If that’s the case, please don’t present it as objective fact, it’s dishonest.
One of the biggest misconceptions is that the stock market is a zero sum game. Its absolutely not. One person can make money without another person losing money. Is that always the case? No. But that doesn't make it a zero sum game. If I buy a few shares from someone, I could be buying them from someone who is up on that investment and wants to cash in on their profit. If that stock continues to do well, everyone win…
One of the biggest misconceptions is that the stock market is a zero sum game. Its absolutely not. One person can make money without another person losing money. Is that always the case? No. But that doesn't make it a zero sum game. If I buy a few shares from someone, I could be buying them from someone who is up on that investment and wants to cash in on their profit. If that stock continues to do well, everyone win…
No, it's by definition a zero sum game. Fundamentally, owning shares in a company grants you rights to a fraction of all future company earnings.
For any given stock transaction:
- there's an agreed upon price, $X
- there's a true value, $Y, which equates to the net present value of all future company earnings that the transacted shares give you access to
- if $X > $Y, the buyer is the loser in the transaction and the seller is the winner
- if $Y > $x, the buyer is the winner; the seller the loser
You may not know what $Y is in any given transaction, but the value certainly exists. And, therefore, a winner and loser exists in every transaction (even if you don't know who it is).
Furthermore, the "amount" won in a transaction is always equal to the "amount" lost by the counter party. This value exchange is abs($Y-$x).
If all individual transactions are zero sum, it should be obvious that the sum of all individual transactions are zero sum.
As you call out in your examples, it's possible for individual (and groups of) participants to come out ahead. But, this is certainly at the expense of other participants in the transaction chain.
One of the biggest misconceptions is that the stock market is a zero sum game. Its absolutely not. One person can make money without another person losing money. Is that always the case? No. But that doesn't make it a zero sum game. If I buy a few shares from someone, I could be buying them from someone who is up on that investment and wants to cash in on their profit. If that stock continues to do well, everyone win…
The only part that's not zero sum are the dividends that are paid out.
It's kind of all a big Ponzi scheme, just with some dividends thrown in. Well, not counting only paid out dividends, but also dividends that are speculated to be paid out some time in the future.