111–120 of 164 posts
My fake portfolio as a kid was heavily IBM weighted. I think it was 120 or 126/share before the crash. This is one of the reasons I got a degree in finance (and economics). I wanted to know what to do with my money if I ever had any.
Let's say there is a big crash coming, where would you put your money for a safe bet and for a speculative bet (and please don't say bitcoin) ? During the crash of 87, it seems like you could still get a good fixed income yield. Parking it today for 1.5% just doesn't seem that valuable.
There are more people looking to invest more money today, so supply/demand means you won't get as good a return. In '87 access to capital was more valuable, so you could get paid more for it.
Let's say there is a big crash coming, where would you put your money for a safe bet and for a speculative bet (and please don't say bitcoin) ? During the crash of 87, it seems like you could still get a good fixed income yield. Parking it today for 1.5% just doesn't seem that valuable.
Safe bet: cash. Speculative bet: put options.
Or were you referring to selling put options?
My fake portfolio as a kid was heavily IBM weighted. I think it was 120 or 126/share before the crash. This is one of the reasons I got a degree in finance (and economics). I wanted to know what to do with my money if I ever had any.
Sounds like a strange logic to me... Is that not like wanting to become a MD just so you can "know what to do" if you ever get sick?
Crashes are actually great for the middle class. The value of the dollar increases as prices come down. Homes, land, property, etc all become cheaper during crashes. This "bull market" is the actual "crash." All its doing is depleting the value of your money
Even back then, they had crazy derivatives.
Crashes are actually great for the middle class. The value of the dollar increases as prices come down. Homes, land, property, etc all become cheaper during crashes. This "bull market" is the actual "crash." All its doing is depleting the value of your money
> Crashes are actually great for the middle class In perhaps one narrow sense. The middle class people who lose their jobs and savings, or whose welfare depends on economic activity (i.e., almost everyone) such as others buying, selling and investing in things don't do so well. Perhaps there is some data on how well the middle class did in 1929, 1988, 2008, etc.
The ONLY middle class individuals that benefit from a crash are those with the cash to buy in at the depreciated prices.
Earlier quoted context omitted.
If there's an IPO of two otherwise identical companies, which one would you pay more for: - company A who's shares will be traded in a deep and liquid market, so you can get rid of them whenever you need money (eg for unforeseen circumstances) - company B who's shares can not be sold easily afterwards? If the answer is A, you see how the secondary market can help the first issuer reap a higher price, thus helping the…
A company's management cares about share price (and sometimes dividends) because that's what the owners of the company (shareholders) care about. If the directors of a publicly traded company don't care about share price, then the shareholders will vote in new management that does. At the same time, share price isn't something management can directly change. They do so by running the business well so that it generate…
For me the topic's related to the grandparent comment's question about 'why should the company (or its management) care about the stock market'?
Earlier quoted context omitted.
"but they could (in theory at least)", uhm, what theory is this? No seriously I would like to hear the theoretical basis for this assertion (though I think you are totally wrong as well).
Well, one theory is that the valuation of bitcoin is largely unrelated to the systematic overvaluation of companies that ostensibly would be the reason behind a crash. Thus when the market start revisiting its value of stocks, this doesn't affect the value of cryptocurrencies.
Eurodollars are U.S. dollars deposited in commercial banks outside the United States and futures tied to the interest rates paid on them are among the most-traded contracts in the world. Even back then, they had crazy derivatives.
Then like now, they are only crazy if you don't understand them.