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Stocks represent fractional ownership of a future income stream - the profits of the underlying corporation. You can (in principle) buy a stock, never sell it,

Stocks represent fractional ownership of a future income stream - the profits of the underlying corporation. You can (in principle) buy a stock, never sell it, and get back more money than you put in. So you're not completely dependent on what others are willing to pay for it in the future. Trading cards (and cryptocurrencies) are not like that. You can only make money if someone else is willing to pay more for it.

capableweb 5y ago
> Stocks represent fractional ownership of a future income stream - the profits of the underlying corporation. You can (in principle) buy a stock, never sell it, and get back more money than you put in. So you're not completely dependent on what others are willing to pay for it in the future. Correct me if I'm wrong, as I don't know much about stocks, but doesn't that require the company to have/pay out dividends? Otherwise you do require others to buy the stock when you sell it. > Trading cards (and cryptocurrencies) are not like that Don't know enough about trading cards to say that you're incorrect, but you're definitely wrong about cryptocurrencies. You can do various things to earn more without loosing your current amount, from staking (Polkadot), loaning (Compound) to getting rewarded for providing liquidity (Uniswap) or for doing nothing at all (Algorand).
- jkhdigital 5y ago
  > doesn't that require the company to have/pay out dividends? If you make money along the way, as opposed to when you sell, then yes. The prevailing corporate playbook seems to prefer stock buybacks over dividends, which accomplishes roughly the same thing but only triggers tax liabilities for the stockholders who “cash out” by selling. Obviously there is a limit to this process, but in a frictionless world of perfect financial knowledge a stockholder would always prefer the buyback approach since it defers taxes on the gains as long as possible.
- GoatOfAplomb 5y ago
  Thank you; I recognize that you're correct regarding cryptocurrency here and I was not. And yes, a company would have to pay dividends, which is what I was hiding in my "in principle" parenthetical.
mym1990 5y ago
With the exception of companies that pay dividends, if you don’t sell the stock you don’t get back anything because it is an unrealized gain(or loss). You trade your money for ownership, and you can only have one or the other.

capableweb 5y ago

> Stocks represent fractional ownership of a future income stream - the profits of the underlying corporation. You can (in principle) buy a stock, never sell it, and get back more money than you put in. So you're not completely dependent on what others are willing to pay for it in the future. Correct me if I'm wrong, as I don't know much about stocks, but doesn't that require the company to have/pay out dividends? Otherwise you do require others to buy the stock when you sell it. > Trading cards (and cryptocurrencies) are not like that Don't know enough about trading cards to say that you're incorrect, but you're definitely wrong about cryptocurrencies. You can do various things to earn more without loosing your current amount, from staking (Polkadot), loaning (Compound) to getting rewarded for providing liquidity (Uniswap) or for doing nothing at all (Algorand).

jkhdigital 5y ago
> doesn't that require the company to have/pay out dividends? If you make money along the way, as opposed to when you sell, then yes. The prevailing corporate playbook seems to prefer stock buybacks over dividends, which accomplishes roughly the same thing but only triggers tax liabilities for the stockholders who “cash out” by selling. Obviously there is a limit to this process, but in a frictionless world of perfect financial knowledge a stockholder would always prefer the buyback approach since it defers taxes on the gains as long as possible.
GoatOfAplomb 5y ago
Thank you; I recognize that you're correct regarding cryptocurrency here and I was not. And yes, a company would have to pay dividends, which is what I was hiding in my "in principle" parenthetical.

mym1990 5y ago

With the exception of companies that pay dividends, if you don’t sell the stock you don’t get back anything because it is an unrealized gain(or loss). You trade your money for ownership, and you can only have one or the other.