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Oh, so stocks must be a ponzi as well.
by read_if_gay_ 3y ago
Oh, so stocks must be a ponzi as well.
- leoedin 3y agoStocks are ownership of something real. The company you own a share of does things in the real world. They can make intelligent (or stupid) decisions about the company strategy. They can enter new markets, or launch new products. They can share a dividend with the owners. Obviously there's still investment bubbles - but underlying it all is ownership in a corporation.
- robertlagrant 3y agoStocks don't rely on other people buying in to create value. They are buying into something with underlying value.
- fragmede 3y agoThat doesn't explain GME or BBY. Which have explanations, but I wouldn't call rush underlying value. Fundamentals define a floor for stock price, but above that it's all vibes. Which is fine, as long as we're on the same page.
- robertlagrant 3y agoI'm not saying rush is underlying value.
- deleted 3y ago[deleted]
- chx 3y agoInvestment into a corporation becomes capital. It is used to buy resources which when combined properly can be sold for more than the raw cost. You are entitled to a share of these profits in the form of dividends. On the other hand, buying crypto"currency" becomes ... just that. It sits there until you sell it to someone else. In other words, if you rolled back all transactions in a stock ever made you'd end up with a positive sum totaling dividends paid out. If you rolled back all Bitcoin transactions you'd end up with a big fat zero. Minus, in both cases, transaction fees but while it's a mere convenience for stocks it's inherent in Bitcoin which makes it a negative sum game and as such a scam.
- jwmoz 3y agoGold.
- RandomLensman 3y agoActually, all commodities and it is a known issue with commodity investments (which maybe are more like trading positions therefore).
- chx 3y agoY'all really should read Stolfi because he carefully addresses all these, gold stock etc > gold has a source of revenue besides the investors; namely, the purchases by consumers like jewelers and industry, who take gold out of the market (2/3 of the production) for uses other than re-sale. When one buys 1 oz of gold, one gets a chip of a metal that one can sell to those consumers, and thus obtain some money that does not come from other investors.
- starcraft2wol 3y agoThis is simply mentally reclassifying "consumers" outside the category of investors. The argument for crypto, etc is the same. There are consumers who want to make purchases, use contracts, etc.
- robertlagrant 3y agoNo, it's saying that gold has value as a commodity as well as a currency. You can't melt down a bitcoin and sell it as jewellery.
- starcraft2wol 3y agoThe commodity use of gold is very minor. It's liked in jewelry not for its utility, but its prestige. So once again gold jewelry holders look an awful lot like investors. Just like how ETH enthusiasts do, even if they also use it to perform tasks with smart contracts.
- FabHK 3y agoTell me you lack basic financial literacy without telling me...
- jwmoz 3y agoThe biggest and greatest of them all!
- hnbad 3y agoNot necessarily but some financial products based on stocks can be and meme stocks usually function much like ponzi schemes (i.e. buying a stock, telling everyone else to buy the stock because it'll go to the moon, then selling the stock before everyone else finds out they were the only ones adding value to it, forcing them to sell at a loss).