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>buying part of a debt and getting the return on it isn't a bad way to fund stuff" Receiving dividends isn't buying part of a debt; it's receiving your share o

>buying part of a debt and getting the return on it isn't a bad way to fund stuff" Receiving dividends isn't buying part of a debt; it's receiving your share of the profits of the company due to ownership. >when savings interest is puny (as now) What do you suppose happens when you "save" money? You think your cash just sits in a bank vault? No, it's put to work by capital allocators, using the same methods you find so unappealing. There is nothing "honorable" about "saving" as opposed to buying and selling individual stocks yourself. >which is essentially a casino game, rigged to those with better information I think you have an odd view of casino games. Such games reveal all probabilities, but those probabilities are titled against you. There is no unknown information, and you will lose in the long run. On the other hand, buying a stock in a company requires you to take some educated guesses about the future. What will future earnings be? What will the economy look like? What technological advances will occur? There is far more uncertainty. At the same time, you know the price you are paying for the stock, and hence, based on your forecasts, can determine whether the company offers a suitable rate of return. What other people are doing is irrelevant. For a site that is so encouraging towards investing in businesses with good ideas, I don't understand the aversion to doing the same through the stock market.

tehwalrus 13y ago
> Receiving dividends isn't buying part of a debt; it's receiving your share of the profits of the company due to ownership. Apologies, I'm applying my own meta-interpretation of company funding - for a non-profit, ownership consists only of the assets since there will never be profit, by definition, so the market goodwill is defined to be 0. In such a situation, you can still get exactly the same money to change hands as an investment in a for-profit - by calling it debt. The non-profit could pay interest on the debt in the same way as dividends are paid, and so on. These work like non-voting/Preference shares. I automatically convert "real" terminology into this framework in my head, as I don't really believe groups of people (companies) can be valued philosophically. Apologies for letting it slip out! > What do you suppose happens when you "save" money? I am well aware of all this, a savings account is a less risky way of doing the same thing (although you're supposed to be investing in mortgages rather than companies). When savings rates are good, there isn't any need to risk your capital (let the bank do it for you). When rates are bad, you need to take on some of the risk yourself in order to get a good return. My analysis doesn't change. > For a site that is so encouraging towards investing in businesses with good ideas, I don't understand the aversion to doing the same through the stock market. But you aren't. If you're buying a new share issue, then sure you are. But if you're buying from someone else in the market, you are not funding the company in any way - they don't get any money out of the transaction - what you are doing is much closer to buying a debt in terms of what money actually changes hands.
- onebaddude 13y ago
  >My analysis doesn't change. My point is that these transactions (putting money in a savings account) are "trades" themselves, and all you're doing is shifting risk around. It isn't a better/worse alternative, it just reallocates the capital, the same way that trading stocks does.

tehwalrus 13y ago

> Receiving dividends isn't buying part of a debt; it's receiving your share of the profits of the company due to ownership. Apologies, I'm applying my own meta-interpretation of company funding - for a non-profit, ownership consists only of the assets since there will never be profit, by definition, so the market goodwill is defined to be 0. In such a situation, you can still get exactly the same money to change hands as an investment in a for-profit - by calling it debt. The non-profit could pay interest on the debt in the same way as dividends are paid, and so on. These work like non-voting/Preference shares. I automatically convert "real" terminology into this framework in my head, as I don't really believe groups of people (companies) can be valued philosophically. Apologies for letting it slip out! > What do you suppose happens when you "save" money? I am well aware of all this, a savings account is a less risky way of doing the same thing (although you're supposed to be investing in mortgages rather than companies). When savings rates are good, there isn't any need to risk your capital (let the bank do it for you). When rates are bad, you need to take on some of the risk yourself in order to get a good return. My analysis doesn't change. > For a site that is so encouraging towards investing in businesses with good ideas, I don't understand the aversion to doing the same through the stock market. But you aren't. If you're buying a new share issue, then sure you are. But if you're buying from someone else in the market, you are not funding the company in any way - they don't get any money out of the transaction - what you are doing is much closer to buying a debt in terms of what money actually changes hands.

onebaddude 13y ago
>My analysis doesn't change. My point is that these transactions (putting money in a savings account) are "trades" themselves, and all you're doing is shifting risk around. It isn't a better/worse alternative, it just reallocates the capital, the same way that trading stocks does.