71–80 of 372 posts
Am I the only one in HN who is not into the stock market? I live in Western Europe and I would say 75% of my acquaintances don't do stock market. People I have known in the past (old people) didn't do stock market either. They all seem to have lived a normal life (decent jobs, decent house, decent family). Nothing extravagant but they got enough money to be "happy" in life.
One interesting thing about "highest bid" and "lowest ask" prices is that they can sometimes move up and down for days without a transaction ever happening. This can be observed in certain illiquid markets, e.g. for a specific bond of a company. In those cases, the "last trade price" is meaningless and it's very important to instead look at the bids and asks in the order book.
Why? Clearly, no one is actually willing to trade at those prices. Sometimes, one illogical price in illiquid markets drive the orderbook to illogical extremes. Without a transaction, all are meaningless.
The lack of "crossing" between those two doesn't mean no one is willing to trade.
Earlier quoted context omitted.
Wirecard entered the chat… I assume you have good intentions, but your post is severely lacking. One crucial thing with this strategy is time. WHEN is the time to buy a falling stock? While it is falling? Or when it is rasing again? Are we talking intraday or months? On a long enough time frame, every company will go extinct and every stock will go to zero. And your post is in direct contradiction of two other common…
I think there is no definite answer, and it's therefore only natural that common insights contradict each other. I've read Ben Graham's often recommended book, and the take there is that the market is a lot of times completely irrational, if not most of the time. A reason for a stock going down could be that it's not "sexy" and not viewed as the future big thing, but if the company has a solid business model, people…
> Everything that goes down either eventually goes up again, or dies.
Sounds smart, says nothing at all. Hence, "buying a beat-down company" is probably not advice that really works. And there are so many companies that never reached their ATHs again.
Earlier quoted context omitted.
It is also the case that professional traders make a lot of money out of retail investors. The percentage of retail investors that actually make money are, iirc, quite small. It doesn't make sense to do something when you don't have the time to get good at it, and being bad at it means you're going to lose money. Sometimes you're forced to (when an investment is tied into a basic necessity, like a house), but you're…
Retail _traders_ tend to lose money, retail _investors_ who buy and hold tend to do OK in the long run. > investment is tied into a basic necessity, like a house ? What does this refer to?
Earlier quoted context omitted.
Why? Clearly, no one is actually willing to trade at those prices. Sometimes, one illogical price in illiquid markets drive the orderbook to illogical extremes. Without a transaction, all are meaningless.
But they _are_ willing to trade at those prices. The person who posted the highest bid is willing to buy at that price and the person who posted the lowest ask is willing to sell at that price. Both regardless of the last trade price. The lack of "crossing" between those two doesn't mean no one is willing to trade.
Earlier quoted context omitted.
Personally I have a philosophical (read marxist) reason to avoid it. Fundamentally I see the stock market as an exploitation tool which the rich use to siphon money away from workers and into their own pockets without contributing. Every dollar you get but didn’t work for was a dollar that somebody else worked for but didn’t get. The stock market is full of transactions which yields profits for the rich while leaving…
Isn't being offered stock in your own company broadly consistent with Marxist principles: workers own a share of the wealth they create? Maybe not as much of a share as they'd like, but I wouldn't have thought that was reason to avoid taking any.
Off-topic from the thrust of this conversation, but I always considered the above extremally risky. If your company goes tits-up, you loose your job and your savings.
This happened to a lot of people during the dot-com crash of 2000. (Unless you have a high risk tolerance, you will want to diversify much more.)
Earlier quoted context omitted.
Personally I have a philosophical (read marxist) reason to avoid it. Fundamentally I see the stock market as an exploitation tool which the rich use to siphon money away from workers and into their own pockets without contributing. Every dollar you get but didn’t work for was a dollar that somebody else worked for but didn’t get. The stock market is full of transactions which yields profits for the rich while leaving…
Isn't being offered stock in your own company broadly consistent with Marxist principles: workers own a share of the wealth they create? Maybe not as much of a share as they'd like, but I wouldn't have thought that was reason to avoid taking any.
Employment is by definition exploitative because a capitalist system requires the owner to derive profits from labor, i.e. pay workers only a part of the value they generate. This isn't a value judgment, this is a matter of definitions: the capitalist mode of production is by definition exploitative because avoiding exploitation would steer the owner towards bankruptcy and thus kill the entire business.
The only solution to avoid this contradiction is to not have a separation between ownership and work, to abolish the capitalist class, i.e. ownership of a business is granted by working for that business, with all the rights and responsibilities ownership implies. However the ultimate ideological goal is usually (similar to how Free Software doesn't want to control copyright but abolish ownership of software) to abolish the notion of ownership or even businesses as distinct entities, much like discrete ownership of land was a nonsensical concept before enclosure (i.e. it was "your land" because you used it and the community was okay with you using it).
I think the most frequent misunderstanding of communism comes from trying to fabricate communist structures within capitalist power dynamics. Most of the prominent "communist experiments" had very little to do with actual communism because they were built around the assumption that they were building a foundation for communism to happen later rather than directly building communism in the here and now (hence the Eastern Bloc phrase "real socialism" as a euphemism for authoritarian governments with mandatory labor and limited democratic instruments, none of which is compatible with the definition of communism).
The thing most people seem to forget is that the goal of "abolishing the capitalist class" is to also abolish the working class as a subjugated dependent group because it is only a meaningful concept when contrasted with an owning class. The Soviet Union failed terribly at this by replacing the capitalist class with bureaucrats, effectively still maintaining a distinct working class and hoping he bureaucracy would magically "wither away" eventually while doing nothing to make that happen. They also tend to forget that the distinction between capitalist and worker is purely about ownership and there are many overlapping hierarchies of power, and owner vs worker is merely one of them (although one of the most important ones).
Does anybody know what happens when the bid is not equal to but higher than the ask? What is the price that will be used? Or will this not lead to a transaction at all?
Generally if a bid is introduced that is higher than the ask, the volume at the ask is matched, then the volume leftover at each ask level is matched in order of price (then time).
One interesting thing about "highest bid" and "lowest ask" prices is that they can sometimes move up and down for days without a transaction ever happening. This can be observed in certain illiquid markets, e.g. for a specific bond of a company. In those cases, the "last trade price" is meaningless and it's very important to instead look at the bids and asks in the order book.
Why? Clearly, no one is actually willing to trade at those prices. Sometimes, one illogical price in illiquid markets drive the orderbook to illogical extremes. Without a transaction, all are meaningless.
Does anybody know what happens when the bid is not equal to but higher than the ask? What is the price that will be used? Or will this not lead to a transaction at all?
First case: you ask for 100 and then I bid 105 --> transaction clears at 100, the ask price
Second case: I bid 105 and then you ask for 100 --> transaction clears at 105, the bid price
This is because I implicitly think about bid offers as "I want to buy this for at most X dollars" and ask offers as "I want to sell this for at least X dollars".
I might be completely wrong though.