6 ms·

>investing should be reserved for fronting cash to create some value (like buying stock to infuse capital into a corporation). As it is all crypto trading is pu

>investing should be reserved for fronting cash to create some value (like buying stock to infuse capital into a corporation). As it is all crypto trading is purely speculation. Ok but let's be real- buying a stock is not really "creating value". The stock already exists. Company A has issued 100 shares. People are buying/selling it in the market.. no one is creating value there. Sure they may be arbitrarily driving the value up, but that's not creating real value. If you want to argue that an IPO is "creating value" because people basically front the money to give capital.. ok fine. But let's not pretend you as a random person buying and selling google shares that already exist is creating value. Also, I would say the people sitting here buying and selling stocks are most of the time 99% pure speculation. They have zero control over what actually happens in the company. Sure they can do "research" and guess what might happen.. but it's still nearly all gambling. Investing is the horrible word for how nearly the entire financial system works. People have created gambling as a way of life, and convinced everyone else that they must gamble their money to make more. Which, surprise surprise, nearly always benefits the rich. Guaranteed pension/good social security? Nah, throw your money into our 401k so we can prop up the rest of the market arbitrarily and continue to drive up everything the rich own so they are richer! And you've all fallen for it.

toomuchtodo 4y ago
Pensions invest in the capital markets. Social security invests in US treasuries. It’s productive activity allocation all the way down.
karpierz 4y ago
> Ok but let's be real- buying a stock is not really "creating value". The stock already exists. Company A has issued 100 shares. People are buying/selling it in the market.. no one is creating value there. Sure they may be arbitrarily driving the value up, but that's not creating real value. If it wasn't possible to resell stocks, capital acquired via stock issuance would be much more expensive. The stock market allows stocks to function as a means of seeding capital. It's like saying "paying back your mortgage doesn't get buy you a house." The mortgage only exists because it gets paid back. > Also, I would say the people sitting here buying and selling stocks are most of the time 99% pure speculation. They have zero control over what actually happens in the company. Sure they can do "research" and guess what might happen.. but it's still nearly all gambling. Yes, which general advice is to spread your capital across the whole market. It used to be that you had to spend your capital building up your own business, which is even worse than trying to pick your own stocks. Now you can diversify your risk world-wide, as to avoid any sort of local calamities.
twawaaay 4y ago
The difference between speculation and investing isn't in that you want to earn money (everybody who buys stock want to increase their wealth). The reason is for why you pick this particular instrument. When I buy stock (or when Berkshire Hathaway does it) I buy into business that I hope has sound fundaments and is going to grow and create more value over time. I spend considerable effort trying to understand the situation the business is in, do they have dangers ahead of them, do they have sound leadership, etc. This is investing -- buying things that you hope are going to increase in value over long time. Speculation is when you buy things for reasons that are not at all connected with the thing you are buying. For example you noticed people are buying crypto, the price is going up, so why not jump in on the wagon and get your cut of the profit. This is speculation because it totally ignores what is it that you are buying, and the only thing that you care is that the price is going up.
- dubswithus 4y ago
  Unless you have an equity position you haven't given the company anything for the shares when you buy Berkshire stock. You are essentially riding off of Buffett's success and making money without doing any work.
  - twawaaay 4y ago
misslibby 4y ago
By buying existing stock you help create a functioning market, which in turn helps other people make investments. That they can sell their stock in the future factors into investment decisions. Therefore imp it is incorrect to say buying existing stocks doesn't create value.

toomuchtodo 4y ago

Pensions invest in the capital markets. Social security invests in US treasuries. It’s productive activity allocation all the way down.

karpierz 4y ago

> Ok but let's be real- buying a stock is not really "creating value". The stock already exists. Company A has issued 100 shares. People are buying/selling it in the market.. no one is creating value there. Sure they may be arbitrarily driving the value up, but that's not creating real value. If it wasn't possible to resell stocks, capital acquired via stock issuance would be much more expensive. The stock market allows stocks to function as a means of seeding capital. It's like saying "paying back your mortgage doesn't get buy you a house." The mortgage only exists because it gets paid back. > Also, I would say the people sitting here buying and selling stocks are most of the time 99% pure speculation. They have zero control over what actually happens in the company. Sure they can do "research" and guess what might happen.. but it's still nearly all gambling. Yes, which general advice is to spread your capital across the whole market. It used to be that you had to spend your capital building up your own business, which is even worse than trying to pick your own stocks. Now you can diversify your risk world-wide, as to avoid any sort of local calamities.

twawaaay 4y ago

The difference between speculation and investing isn't in that you want to earn money (everybody who buys stock want to increase their wealth). The reason is for why you pick this particular instrument. When I buy stock (or when Berkshire Hathaway does it) I buy into business that I hope has sound fundaments and is going to grow and create more value over time. I spend considerable effort trying to understand the situation the business is in, do they have dangers ahead of them, do they have sound leadership, etc. This is investing -- buying things that you hope are going to increase in value over long time. Speculation is when you buy things for reasons that are not at all connected with the thing you are buying. For example you noticed people are buying crypto, the price is going up, so why not jump in on the wagon and get your cut of the profit. This is speculation because it totally ignores what is it that you are buying, and the only thing that you care is that the price is going up.

dubswithus 4y ago
Unless you have an equity position you haven't given the company anything for the shares when you buy Berkshire stock. You are essentially riding off of Buffett's success and making money without doing any work.
- twawaaay 4y ago

misslibby 4y ago

By buying existing stock you help create a functioning market, which in turn helps other people make investments. That they can sell their stock in the future factors into investment decisions. Therefore imp it is incorrect to say buying existing stocks doesn't create value.