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Isn’t that the same for gold? That it’s for speculation? Or stocks.
by dsco 5y ago
Isn’t that the same for gold? That it’s for speculation? Or stocks.
- Cthulhu_ 5y agoGold has a practical application creating demand, in addition to it being a speculative product. I guess you could argue the same for BTC in that you can put short messages in it, but I don't think that's a very valuable thing to have.
- disruptalot 5y agoYou forget the payment network without a third party.
- robjan 5y agoStocks represent an ownership in a company. They can be speculated on but that's not the primary purpose.
- ragnese 5y agoI very much disagree. How many people with 401ks and/or other retirement vehicles actually know what companies they "own"? How many of them vote? How many of them actually have enough of the right kinds of shares to vote? To say that stocks are about owning a company in practice is the same as saying bitcoin is just money like the dollar. It's true in theory, but it's not the practical reality of this moment in history.
- alkonaut 5y agoIf they bought the stock they are helping fund the business. The shareholders are keeping the stock because it represents their stake but the actual money paid can be used by the company selling its stock and that’s the primary purpose. Whether the buyer/investor votes, or knows what they bought, doesn’t change anything in that respect.
- ragnese 5y agoWell, of course there are other subtleties involved, but even the money that I pay for a given stock doesn't just go to the company unless it's an IPO. It might indirectly benefit the company because I'm adding to the demand and driving the stock price up, which helps all holders of the stock, including the company that issued the stock originally. However, my point is that people are not buying stocks to own OR to benefit the company. They're buying stock so that a "bigger sucker" will come around later and buy it from them and they can make a profit. So I guess it depends on who we're talking about when we say "primary purpose", but for anyone who is purchasing stocks, the primary purpose is NOT to be an owner of a company. The primary purpose is to speculate.
- saalweachter 5y agoA trillion dollars a year are disbursed by the companies of the S&P 500 to their shareholders, in the form of dividends and stock buybacks. Berkshire Hathaway itself bought back $25B of its stock in 2020.
- ragnese 5y agoBuybacks absolutely count under speculation-then-bigger-sucker.
- saalweachter 5y agoThe difference between a stock buyback and iterative speculation is that the "bigger sucker" in a stock buyback is the customer interested in the actual product being sold by the company.
- tromp 5y agoIf you buy into an IPO you're helping the business raise funds. If you buy stock from other stock owners it doesn't help the business.
- 5y ago