5 ms·

If you haven't sold then you haven't made a profit.

capableweb 6y ago
I guess with that same mindset Jeff Bezos, Bill Gates and Mark Zuckerberg aren't probably the worlds richest as they have their money locked up in assets etc. Only drug lords should count on the list of the richest as they are the only ones holding money in actual cash (together with assets etc).
- bluesign 6y ago
  It is not about locked up on asset, it is about locked up on volatile asset vs stable asset.
  - capableweb 6y ago
    No, that's not at all what bondarchuk said. bondarchuk hinted that if you don't have the cash from selling something, you can't count that as making a profit, as you haven't actually taken any profit. Why would it matter if it's volatile or stable?
    - leereeves 6y ago
      It might matter to someone who wants their headline to still be true in two days, which this headline isn't at the moment, after Bitcoin's recent drop. The value of any asset might change significantly in two days, but the odds of that are much, much higher with Bitcoin.
      - capableweb 6y ago
        Yeah, if you're into a life that doesn't move forward, I don't think you have a lot of options. Many of our headlines today are ephemeral and true for now, but historically becomes false after a while. Bitcoin is no exception.
        leereeves 6y ago
        I think most people are into a life that doesn't move forward 15% one day then backward 15% the next, leading to ephemeral "profits" like these. For those who would rather live in a world where headlines are true one day and false the next, and wealth is ephemeral, Bitcoin is a good place to find that thrill. And prematurely reporting unrealized profits seems to fit the Bitcoin mindset nicely. Goes well with "money" not actually used for (legal) transactions and a "store of value" that regularly changes value more than 10% in a day. The hype train must keep on moving, lest the party end.
        capableweb 6y ago
        Sure, but what does that have to do with the initial point that this thread is about?!
    - bluesign 6y ago
      Imagine you have 2 people, applying for a loan from you. - 1 has AMAZON shares worth 5000 USD as collateral - 2 has BITCOIN worth 5000 USD as collateral you can say for example, you can grant 4000 USD credit for 1, maybe 2000 USD credit for 2.
- gpm 6y ago
  This is actually a very reasonable complaint about the estimates of their wealth, it's unlikely that they could convert a significant portion of their stock into dollars at the current price... 1 share might be equivalent to 100 dollars, 1 billion shares is unlikely to be equivalent to 100 billion dollars.
  - est31 6y ago
    When public companies make offers to buy each other, they usually offer prices a few percent above the public market value, no? Maybe Amazon is worth less without having a strong leadership. At least Apple gained a lot from the co-founder coming back. But in general, if he sells in small packages, he should be able to convert his stocks into cash if he wanted to.
    - gpm 6y ago
      A company (or anyone else) attempting to buy all of a public company does pay a premium, but no one is about to take Amazon private. Selling in small packages, alleviates one problem (lack of instantaneous demand), but it still increases the supply of shares in the market, which is going lower the price. That's before you consider effects like strong leadership or that the apparent lack of confidence from the big share holder is going to decrease the price. Edit: Incidentally if you look at Bezos's trading history, you'll discover that he has been doing the "sell in small packages thing". I'd speculate that he's doing it as fast as he thinks he can get away with: https://finviz.com/insidertrading.ashx?oc=1043298&tc=7 https://finviz.com/insidertrading.ashx?oc=1043298&tc=7
  - robjan 6y ago
    When large investors sell they usually don't sell on the exchange, partially to avoid moving the market too much.
  - inter_netuser 6y ago
    Such transactions happen routinely. It is not at all an issue, the largest were 180-250 billion deals. https://en.wikipedia.org/wiki/List_of_largest_mergers_and_acquisitions#2020s https://en.wikipedia.org/wiki/List_of_largest_mergers_and_ac...
- hoseja 6y ago
  Actually old nobility specifically not included on "richest" lists.
- adventured 6y ago
  The reference claim is that Tesla has made a $1 billion profit, emphasis on profit. You only generate a profit in that context if you've sold. If you'd like a proof on how this works in action, let your gain in a stock (or Bitcoin) evaporate, sell your position at break-even, and then demand to be paid your former unrealized 'profit,' see what happens. What does any of that have to do with Gates or Bezos holding stock in a company?
- j7ake 6y ago
  Yes, for example the CEO of Theranos was a billionaire but dropped to 0 overnight after exposure of fraud.
- xiphias2 6y ago
  It's not a mindset, profit is defined in accounting law, and Bitcoin is considered an intangible asset, where price inceeases are not accounted as profit (but losses are written down).
  - capableweb 6y ago
    Too bad the "accounting law" you are referring to is most likely the American one and doesn't apply worldwide, which Bitcoin does. The way you describe it to work is not applicable everywhere.
    - xiphias2 6y ago
      Sure, I was writing about Tesla’s case, as it’s a US company.
- tom_mellior 6y ago
  > I guess with that same mindset Jeff Bezos, Bill Gates and Mark Zuckerberg aren't probably the worlds richest as they have their money locked up in assets etc. This is a hilarious statement on the very day that The Guardian reports that Elon Musk is no longer the world's richest person precisely because that wealth is locked up in assets that lost value. https://www.theguardian.com/technology/2021/feb/23/elon-musk-worlds-richest-person-tesla-shares-jeff-bezos-bitcoin-price https://www.theguardian.com/technology/2021/feb/23/elon-musk...
velcro 6y ago
Exactly - especially given that BTC is -13% today.
umanwizard 6y ago
Why? Assuming a sufficiently liquid asset, not selling is identical to selling and re-buying for the same amount.
- deleted 6y ago
  [deleted]
cm2187 6y ago
Though for a company it is still a taxable gain!
- chid 6y ago
  Typically not until it is realised
  - cm2187 6y ago
    For an individual. For most companies an increase in the fair value of a financial asset is a taxable gain, unless it can achieve a special accounting treatment. But I doubt a position in btc wouldn't be fair valued.
colonwqbang 6y ago
In the article body they use the more accurate term "paper profit".

I guess with that same mindset Jeff Bezos, Bill Gates and Mark Zuckerberg aren't probably the worlds richest as they have their money locked up in assets etc. Only drug lords should count on the list of the richest as they are the only ones holding money in actual cash (together with assets etc).

bluesign 6y ago
It is not about locked up on asset, it is about locked up on volatile asset vs stable asset.
- capableweb 6y ago
  No, that's not at all what bondarchuk said. bondarchuk hinted that if you don't have the cash from selling something, you can't count that as making a profit, as you haven't actually taken any profit. Why would it matter if it's volatile or stable?
  - leereeves 6y ago
    It might matter to someone who wants their headline to still be true in two days, which this headline isn't at the moment, after Bitcoin's recent drop. The value of any asset might change significantly in two days, but the odds of that are much, much higher with Bitcoin.
    - capableweb 6y ago
      Yeah, if you're into a life that doesn't move forward, I don't think you have a lot of options. Many of our headlines today are ephemeral and true for now, but historically becomes false after a while. Bitcoin is no exception.
      - leereeves 6y ago
        I think most people are into a life that doesn't move forward 15% one day then backward 15% the next, leading to ephemeral "profits" like these. For those who would rather live in a world where headlines are true one day and false the next, and wealth is ephemeral, Bitcoin is a good place to find that thrill. And prematurely reporting unrealized profits seems to fit the Bitcoin mindset nicely. Goes well with "money" not actually used for (legal) transactions and a "store of value" that regularly changes value more than 10% in a day. The hype train must keep on moving, lest the party end.
        capableweb 6y ago
        Sure, but what does that have to do with the initial point that this thread is about?!
  - bluesign 6y ago
    Imagine you have 2 people, applying for a loan from you. - 1 has AMAZON shares worth 5000 USD as collateral - 2 has BITCOIN worth 5000 USD as collateral you can say for example, you can grant 4000 USD credit for 1, maybe 2000 USD credit for 2.
gpm 6y ago
This is actually a very reasonable complaint about the estimates of their wealth, it's unlikely that they could convert a significant portion of their stock into dollars at the current price... 1 share might be equivalent to 100 dollars, 1 billion shares is unlikely to be equivalent to 100 billion dollars.
- est31 6y ago
  When public companies make offers to buy each other, they usually offer prices a few percent above the public market value, no? Maybe Amazon is worth less without having a strong leadership. At least Apple gained a lot from the co-founder coming back. But in general, if he sells in small packages, he should be able to convert his stocks into cash if he wanted to.
  - gpm 6y ago
    A company (or anyone else) attempting to buy all of a public company does pay a premium, but no one is about to take Amazon private. Selling in small packages, alleviates one problem (lack of instantaneous demand), but it still increases the supply of shares in the market, which is going lower the price. That's before you consider effects like strong leadership or that the apparent lack of confidence from the big share holder is going to decrease the price. Edit: Incidentally if you look at Bezos's trading history, you'll discover that he has been doing the "sell in small packages thing". I'd speculate that he's doing it as fast as he thinks he can get away with: https://finviz.com/insidertrading.ashx?oc=1043298&tc=7 https://finviz.com/insidertrading.ashx?oc=1043298&tc=7
- robjan 6y ago
  When large investors sell they usually don't sell on the exchange, partially to avoid moving the market too much.
- inter_netuser 6y ago
  Such transactions happen routinely. It is not at all an issue, the largest were 180-250 billion deals. https://en.wikipedia.org/wiki/List_of_largest_mergers_and_acquisitions#2020s https://en.wikipedia.org/wiki/List_of_largest_mergers_and_ac...
hoseja 6y ago
Actually old nobility specifically not included on "richest" lists.
adventured 6y ago
The reference claim is that Tesla has made a $1 billion profit, emphasis on profit. You only generate a profit in that context if you've sold. If you'd like a proof on how this works in action, let your gain in a stock (or Bitcoin) evaporate, sell your position at break-even, and then demand to be paid your former unrealized 'profit,' see what happens. What does any of that have to do with Gates or Bezos holding stock in a company?
j7ake 6y ago
Yes, for example the CEO of Theranos was a billionaire but dropped to 0 overnight after exposure of fraud.
xiphias2 6y ago
It's not a mindset, profit is defined in accounting law, and Bitcoin is considered an intangible asset, where price inceeases are not accounted as profit (but losses are written down).
- capableweb 6y ago
  Too bad the "accounting law" you are referring to is most likely the American one and doesn't apply worldwide, which Bitcoin does. The way you describe it to work is not applicable everywhere.
  - xiphias2 6y ago
    Sure, I was writing about Tesla’s case, as it’s a US company.
tom_mellior 6y ago
> I guess with that same mindset Jeff Bezos, Bill Gates and Mark Zuckerberg aren't probably the worlds richest as they have their money locked up in assets etc. This is a hilarious statement on the very day that The Guardian reports that Elon Musk is no longer the world's richest person precisely because that wealth is locked up in assets that lost value. https://www.theguardian.com/technology/2021/feb/23/elon-musk-worlds-richest-person-tesla-shares-jeff-bezos-bitcoin-price https://www.theguardian.com/technology/2021/feb/23/elon-musk...

velcro 6y ago

Exactly - especially given that BTC is -13% today.

umanwizard 6y ago

Why? Assuming a sufficiently liquid asset, not selling is identical to selling and re-buying for the same amount.

deleted 6y ago
[deleted]

cm2187 6y ago

Though for a company it is still a taxable gain!

chid 6y ago
Typically not until it is realised
- cm2187 6y ago
  For an individual. For most companies an increase in the fair value of a financial asset is a taxable gain, unless it can achieve a special accounting treatment. But I doubt a position in btc wouldn't be fair valued.

colonwqbang 6y ago

In the article body they use the more accurate term "paper profit".