51–60 of 93 posts
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How much is a share of Amazon worth considering they don't pay any dividends? Isn't this the same thing?
No because Amazon generates earnings but reinvests those in its business to make each share worth more.
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No because Amazon generates earnings but reinvests those in its business to make each share worth more.
How does it make the shares worth more if they are not entitled to dividends?
If I promise to pay you $100 10 years from now, is that agreement worthless because you didn't get it today? No you discount the time factor into current value.
The people who got wiped out on growth tech don't understand this concept
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> Calling it a Ponzi scheme is uninteresting and not really the point here. Was GameStop a Ponzi scheme when the stock price soared? I’d argue that the intent of GameStop was not to provide a solid investment as it was just as a collective intent to make short sellers fail. I have serious trouble seeing how “collective agreements” has any intrinsic value. To me, it’s effectively the same as saying “the value of coin…
> I have serious trouble seeing how “collective agreements” has any intrinsic value. Then you probably don’t see value in any form of cryptocurrency. I do, because I think collective agreements are at the heart of how society functions. Fiat money is a collective agreement that works by the backing and enforcement of a central entity (government). It’s at least interesting to me to experiment with a collective agreem…
How collective agreements compare against them is an interesting question of modern economics vs history.
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No because Amazon generates earnings but reinvests those in its business to make each share worth more.
How does it make the shares worth more if they are not entitled to dividends?
Bezos has 2 options. He can pay me $1 as a dividend or he can reinvest that $1 into his business and make my share worth $11.
His choice does not matter in the absence of taxes and other costs.
If he does not pay out a $1 dividend but I want a $1 dividend, I will sell 1/11th of my $11 share and get $1.
If he does pay out a $1 dividend but I do not want a $1 dividend, I will use his $1 payout to buy 1/10th of a $10 share and now own 1.1 share.
In both cases I have $11.
The difference between this and crypto is that crypto has no earnings. If SBF and his coinmaker friends want to pay me $1 on my $10 ("yield farming") they must do it by taking $1 from new investors to pay me. But who will pay those new investors?
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How does it make the shares worth more if they are not entitled to dividends?
Say I own 1 share of Amazon worth $10 and Amazon earns $1 on that share. Bezos has 2 options. He can pay me $1 as a dividend or he can reinvest that $1 into his business and make my share worth $11. His choice does not matter in the absence of taxes and other costs. If he does not pay out a $1 dividend but I want a $1 dividend, I will sell 1/11th of my $11 share and get $1. If he does pay out a $1 dividend but I do n…
They are betting that when the crash comes they can throw their arms in the air and say “well that was to bad, sell pressure outweighed buy pressure as the value went to zero, but that’s not our fault” all the while everyone who ever put money in the box have been slowly draining the excess. Naturally those in the know and on the inside have had the best oppotunity to drain the spoils, but in principle anyone could have done it all along. And so it goes that it’s not their fault and they didn’t mislead anyone. It’s just a Ponzi scheme going Ponzi, with everyone who joined up being partially to blame all on their own.
I hope it doesn’t go down like that, but that’s what it looks like.
DeFi/crypto detractors will say "but there's nothing backing it" which is not entirely crazy. After all you could just print out bits of paper and exchange them for money, so long as someone is willing to play that game with you. Blockchain is no different, it's just a clever way to record who has what. So why do people put billions in crypto but not in random bits of paper such as Pokemon cards? Liquidity. This is t…
Well put. The financial system largely exist for the purpose of wealth extraction. Sure, companies use the share market to initially raise capital but what is the true value of Amazon stock considering they don't issue dividends? Even with a stock that issues dividends how do know that it will happen for years to come? It's all speculation backed by nothing but emotion.
The way I had it described involved at least 2 types of coins, with varying rates on different platforms. And a sort of cyclical loop where you were borrowing on one platform + token, to buy more of another (different) token, with a price inequality between them that facilitated this loop infinitely.
It was described to me as blatantly "degenerate" and "the equivalent of a money-printing machine/a bug in game code."
I don't see anything wrong with it. Money isn't about ethics, and the people who explained this to me make several times my annual income from doing this.
Personally, I don't want to invest the free time to try to keep up with all this crypto stuff.