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You’re not really buying actual return of investment dollars via dividends anymore. You’re buying access to market share. Companies drive revenue so that they

You’re not really buying actual return of investment dollars via dividends anymore. You’re buying access to market share. Companies drive revenue so that they can drive market share more than anything. Owning a piece of the economy is what folks are doing with their 35 PE share purchases, particularly if they think the revenue as a percentage of market is going to grow.

andrewmcwatters 5y ago
> You’re buying access to market share. What does this even mean? > Owning a piece of the economy is what folks are doing with their 35 PE share purchases, particularly if they think the revenue as a percentage of market is going to grow. If any given market shrinks in absolute terms, it doesn't matter if "market share" goes up. 100% of 5 customers is 5 customers.
anm89 5y ago
These are the kinds of quotes they post in the documentary about the crash to demonstrate the hubris of the time. You are essentially arguing for the financial equivalent of a perpetual motion machine.
hyperman1 5y ago
Do I get this right? The only way to make money from a stock is to sell it to someone else. The only reason they buy it from you is to do the same. So everybody gets richer, except the one who owns it when the bubble bursts, who loses everything. This is the definition of a ponzy scheme.
- mike_d 5y ago
  In a Stocks 101 sense, yes. You can receive dividends from companies, use or sell your vote to influence company decisions, loan your stock in exchange for money, etc.
- anm89 5y ago
  This is very specifically not the definition of a ponzi scheme. actually it meets literally none of the criteria of a ponzi scheme except maybe the fact that money is involved and somebody loses money. if there is a real asset involved in the scheme its just called speculation. not all speculation has anything to do with a ponzi scheme. it would be a ponzi scheme if you advertised this investment as a service and then never bought the actual underlying asset but just shuffled funds through to payout investors. so yeah, literally zero overlap with a ponzi scheme. another angle: by your definition, all investments in commodities where you don't plan to take physical delivery are ponzi schemes and all zero dividend stocks are ponzi schemes (which is wrong)

andrewmcwatters 5y ago

> You’re buying access to market share. What does this even mean? > Owning a piece of the economy is what folks are doing with their 35 PE share purchases, particularly if they think the revenue as a percentage of market is going to grow. If any given market shrinks in absolute terms, it doesn't matter if "market share" goes up. 100% of 5 customers is 5 customers.

anm89 5y ago

These are the kinds of quotes they post in the documentary about the crash to demonstrate the hubris of the time. You are essentially arguing for the financial equivalent of a perpetual motion machine.

hyperman1 5y ago

Do I get this right? The only way to make money from a stock is to sell it to someone else. The only reason they buy it from you is to do the same. So everybody gets richer, except the one who owns it when the bubble bursts, who loses everything. This is the definition of a ponzy scheme.

mike_d 5y ago
In a Stocks 101 sense, yes. You can receive dividends from companies, use or sell your vote to influence company decisions, loan your stock in exchange for money, etc.
anm89 5y ago
This is very specifically not the definition of a ponzi scheme. actually it meets literally none of the criteria of a ponzi scheme except maybe the fact that money is involved and somebody loses money. if there is a real asset involved in the scheme its just called speculation. not all speculation has anything to do with a ponzi scheme. it would be a ponzi scheme if you advertised this investment as a service and then never bought the actual underlying asset but just shuffled funds through to payout investors. so yeah, literally zero overlap with a ponzi scheme. another angle: by your definition, all investments in commodities where you don't plan to take physical delivery are ponzi schemes and all zero dividend stocks are ponzi schemes (which is wrong)