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The categorization of scam is interesting in this context. Why isn’t gamestop considered a scam? Why is Enron? From the point of view of a worker which gets the

The categorization of scam is interesting in this context. Why isn’t gamestop considered a scam? Why is Enron? From the point of view of a worker which gets their profits diluted in dividends payed to shareholders, the very existence of a stock market very much looks like a scam. Another interesting aspect is various cryptocurrencies (or—as per recent discussion—NFTs). I guess whatever the establishment is uncomfortable with will be labelled as scam. Perhaps future will look at GameStop as a scam. But from my point of view, trading in stocks is always a scam.

dragontamer 6y ago
> From the point of view of a worker which gets their profits diluted in dividends payed to shareholders I hate Tesla, but their IPOs and SPOs are a great example of what the stock market offers, and why a dividend (or other reward) is necessary. Without raising $5 Billion from investors back in 2014, Tesla wouldn't have had the money to build their Nevada Gigafactory. ------ Banks offer loans, which depend on interest rates. Shareholders don't want money, they want a share of the future profits. As such, the "promise" you make to a shareholder is more flexible, longer-looking, a better deal for most people involved. If you can't make money this year, or next year, or 5 years from now... shareholders are forward looking enough to still give you money. As long as that share they received truly benefits 5, 10, 15, or 20 years from now. ---------- Owning a right to future profits and a vote for the board-of-directors is a powerful thing. Shareholders become one of the owners of the company, with all the rights associated with that. --------- So. Lets timetravel back to 2014. Tesla needs money. It wants public money: willing to give you a piece of ownership (aka: future dividends and a vote for the board-of-directors). It promises to use that money to build a Gigafactory in Nevada. Today: we now have a company, and set of shareholders, who BOTH benefit from the situation. That's the magic of the stockmarket. It turns out that the "promise of future profits + voting rights" is a powerful item to trade.
- runarberg 6y ago
  This still doesn’t make things look less like a scam. An anecdote of where the scheme worked for some people in the past is a very common thing for a scammer to tell future victims in order to persuade them into the scam. Example: [Person A] was a single parent living paycheck to paycheck, then they started selling [pyramid product X] and now they’re sending their kids through collage on the profits alone. Shareholders not making money is akin to saying that pyramid scammers don’t make money, off course they do... Otherwise they wouldn’t be spending their time and energy doing this. Every dollar you earn by doing nothing is a dollar made by someone else they didn’t get.
  - dragontamer 6y ago
    There's no payoff for a pyramid scheme. They just pile money somewhere, without actually doing anything with it. A pyramid scheme is literally the "Wicked and Evil" 3rd servant from the parable of the talents. They waste the huge pile of money by burying it and not really making it work for their masters. The expectation of the Stock Market is to do something with the money. For Amazon, the IPO allowed them to buy servers. For Google, same thing: tons of computers cost tons of money. For Tesla, they bought a Nevada Factory. The money disappeared into a Factory, and then the Factory made money later (which is then used to increase the value of shares and make everyone who participated richer). ---------- This is allowed in part, because it works. It makes society stronger. It rewards risk-takers who would otherwise do nothing with their money. It provides thinkers with money and capital when they need it most. If the scheme doesn't work out, the investors lose, but they're still happy that they got to partake in the experiment. Stocks are the original "Kickstarter". And I argue that they're far more fair than kickstarter. Owning a vote for the board-of-directors + a share of the promised dividend is worth a hell of a lot more than stupid keychains.
    - runarberg 6y ago
      > There's no payoff for a pyramid scheme. They just pile money somewhere, without actually doing anything with it. Agreed, the stock market is not a pyramid scheme. I only used pyramid scheme as an example for a scammer’s rhetoric. However it still looks like a scam to me (albeit not as bad of a scam as the average pyramid scheme is). Having worked for a company which increased in share prices exponentially while I worked there on minimum wage, I cannot agree with the statement that the shareholder/worker relationship made “everyone who participated richer”. The average worker certainly didn’t. The only people that got richer were the shareholders (and perhaps some contractors). I experienced this exponential growth as a scam. The value of my work was being extracted into rich people’s pockets. See the stock market might look to an outsider as an arrangement where everyone benefits, but to a worker it always looks like a scam. Especially when you consider an alternate arrangement where the shareholder returns control of the profits of the company back to the workers after they’ve made up the money they gave originally to the business plus some fees and interest. The very fact that the shareholders keep control even after they’ve made their fare share of the profits, multiple times over, is what makes this look like a scam in the eyes of the workers.
AnimalMuppet 6y ago
> From the point of view of a worker which gets their profits diluted in dividends payed to shareholders, the very existence of a stock market very much looks like a scam. Only if the worker doesn't understand that the initial sale of stock raised the money that let the company buy the tools that the worker uses to make the profits. Getting that money without paying dividends looks like a scam where the stock owners are the suckers.
- runarberg 6y ago
  To me this looks like predatory lending. I.e. selling stocks in order to raise money to get means of production is for all intents and purposes the same as getting a loan which you are never allowed to pay back, and your lenders will continue to collect interests, tied to your profits, indefinitely. Still very much looks like a scam.
  - joshuamorton 6y ago
    Its not a loan though. If you fail to make money from your venture, you don't owe the "lender" anything. So you remove the risk to you (you can't owe someone $1 million without any way to pay it). The tradeoff is that you sacrifice some of the upside.
    - runarberg 6y ago
      This still looks like a scam though. A predatory lender which never accepts paying down the capital, but assumes risks where some of their clients might not turn a profit and therefor is a net loss, will simply raise the interest (or—in the case of an investor—the share of the profits) from the profitable clients to counter the loss. This is exactly the behavior of shareholders, and to my eyes it still very much looks like a scam.
      - AnimalMuppet 6y ago
        The shareholders don't set the amount of the dividends. That is, in your analogy, the lender doesn't get to raise the interest rate. That kind of blows up your analogy. But by all means, tell us again how it looks like a scam. Maybe we'll start to agree with you if you repeat it a couple more times.
deleted 6y ago
[deleted]

dragontamer 6y ago

> From the point of view of a worker which gets their profits diluted in dividends payed to shareholders I hate Tesla, but their IPOs and SPOs are a great example of what the stock market offers, and why a dividend (or other reward) is necessary. Without raising $5 Billion from investors back in 2014, Tesla wouldn't have had the money to build their Nevada Gigafactory. ------ Banks offer loans, which depend on interest rates. Shareholders don't want money, they want a share of the future profits. As such, the "promise" you make to a shareholder is more flexible, longer-looking, a better deal for most people involved. If you can't make money this year, or next year, or 5 years from now... shareholders are forward looking enough to still give you money. As long as that share they received truly benefits 5, 10, 15, or 20 years from now. ---------- Owning a right to future profits and a vote for the board-of-directors is a powerful thing. Shareholders become one of the owners of the company, with all the rights associated with that. --------- So. Lets timetravel back to 2014. Tesla needs money. It wants public money: willing to give you a piece of ownership (aka: future dividends and a vote for the board-of-directors). It promises to use that money to build a Gigafactory in Nevada. Today: we now have a company, and set of shareholders, who BOTH benefit from the situation. That's the magic of the stockmarket. It turns out that the "promise of future profits + voting rights" is a powerful item to trade.

runarberg 6y ago
This still doesn’t make things look less like a scam. An anecdote of where the scheme worked for some people in the past is a very common thing for a scammer to tell future victims in order to persuade them into the scam. Example: [Person A] was a single parent living paycheck to paycheck, then they started selling [pyramid product X] and now they’re sending their kids through collage on the profits alone. Shareholders not making money is akin to saying that pyramid scammers don’t make money, off course they do... Otherwise they wouldn’t be spending their time and energy doing this. Every dollar you earn by doing nothing is a dollar made by someone else they didn’t get.
- dragontamer 6y ago
  There's no payoff for a pyramid scheme. They just pile money somewhere, without actually doing anything with it. A pyramid scheme is literally the "Wicked and Evil" 3rd servant from the parable of the talents. They waste the huge pile of money by burying it and not really making it work for their masters. The expectation of the Stock Market is to do something with the money. For Amazon, the IPO allowed them to buy servers. For Google, same thing: tons of computers cost tons of money. For Tesla, they bought a Nevada Factory. The money disappeared into a Factory, and then the Factory made money later (which is then used to increase the value of shares and make everyone who participated richer). ---------- This is allowed in part, because it works. It makes society stronger. It rewards risk-takers who would otherwise do nothing with their money. It provides thinkers with money and capital when they need it most. If the scheme doesn't work out, the investors lose, but they're still happy that they got to partake in the experiment. Stocks are the original "Kickstarter". And I argue that they're far more fair than kickstarter. Owning a vote for the board-of-directors + a share of the promised dividend is worth a hell of a lot more than stupid keychains.
  - runarberg 6y ago
    > There's no payoff for a pyramid scheme. They just pile money somewhere, without actually doing anything with it. Agreed, the stock market is not a pyramid scheme. I only used pyramid scheme as an example for a scammer’s rhetoric. However it still looks like a scam to me (albeit not as bad of a scam as the average pyramid scheme is). Having worked for a company which increased in share prices exponentially while I worked there on minimum wage, I cannot agree with the statement that the shareholder/worker relationship made “everyone who participated richer”. The average worker certainly didn’t. The only people that got richer were the shareholders (and perhaps some contractors). I experienced this exponential growth as a scam. The value of my work was being extracted into rich people’s pockets. See the stock market might look to an outsider as an arrangement where everyone benefits, but to a worker it always looks like a scam. Especially when you consider an alternate arrangement where the shareholder returns control of the profits of the company back to the workers after they’ve made up the money they gave originally to the business plus some fees and interest. The very fact that the shareholders keep control even after they’ve made their fare share of the profits, multiple times over, is what makes this look like a scam in the eyes of the workers.

AnimalMuppet 6y ago

> From the point of view of a worker which gets their profits diluted in dividends payed to shareholders, the very existence of a stock market very much looks like a scam. Only if the worker doesn't understand that the initial sale of stock raised the money that let the company buy the tools that the worker uses to make the profits. Getting that money without paying dividends looks like a scam where the stock owners are the suckers.

runarberg 6y ago
To me this looks like predatory lending. I.e. selling stocks in order to raise money to get means of production is for all intents and purposes the same as getting a loan which you are never allowed to pay back, and your lenders will continue to collect interests, tied to your profits, indefinitely. Still very much looks like a scam.
- joshuamorton 6y ago
  Its not a loan though. If you fail to make money from your venture, you don't owe the "lender" anything. So you remove the risk to you (you can't owe someone $1 million without any way to pay it). The tradeoff is that you sacrifice some of the upside.
  - runarberg 6y ago
    This still looks like a scam though. A predatory lender which never accepts paying down the capital, but assumes risks where some of their clients might not turn a profit and therefor is a net loss, will simply raise the interest (or—in the case of an investor—the share of the profits) from the profitable clients to counter the loss. This is exactly the behavior of shareholders, and to my eyes it still very much looks like a scam.
    - AnimalMuppet 6y ago
      The shareholders don't set the amount of the dividends. That is, in your analogy, the lender doesn't get to raise the interest rate. That kind of blows up your analogy. But by all means, tell us again how it looks like a scam. Maybe we'll start to agree with you if you repeat it a couple more times.

deleted 6y ago

[deleted]