[SteveC]

Sell your stocks and you won't have to waste your time watching numbers go up and down. The whole system is just a ponzi scheme. (There is a reason why planes fly into banks.)

Whatever gain you make must come at someone else's expense, therefore for others to gain you must lose.

How did Fidelity ever get its start on Boston? History repeats itself!

http://en.wikipedia.org/wiki/Ponzi_scheme

[pmazer]

Originally Posted by SteveC Sell your stocks and you won't have to waste your time watching numbers go up and down. The whole system is just a ponzi scheme. (There is a reason why planes fly into banks.) Whatever gain you make must come at someone else's expense, therefore for others to gain you must lose. How did Fidelity ever get its start on Boston? History repeats itself! http://en.wikipedia.org/wiki/Ponzi_scheme

I'm not really sure I should bother responding to this, but whatever. Stocks aren't a zero-sum game. If you invest in a company, and that company ends up doing well, you gain profits from that. In no way is that a zero-sum game. If a company does well, that doesn't have to be because they knock someone else down.

[SteveC]

Originally Posted by pmazer I'm not really sure I should bother responding to this, but whatever. Stocks aren't a zero-sum game. If you invest in a company, and that company ends up doing well, you gain profits from that. In no way is that a zero-sum game. If a company does well, that doesn't have to be because they knock someone else down.

Stock prices are not determined by what a company does or doesn't do; stock prices are based on expectations. If a company makes "less than expected" it stocks can go up or down, regardless of its profitability. Similarly, a company can lose money (Amazon) and its stock continue to climb.

The brokers make money if you play; they don't care if you win or lose, they just want everyone to play. (They never say get out of the market, they say to trade more. Move your stocks and increase heir commissions, etc.) Players who own stock want you to play, because your purchase will drive up the value of their stock, and you get to pay the higher price. Thus one sucker goes out and promotes the stock, just like the original ponzi scheme.

I will admit that it isn't always a classic case of fraud, like the original ponzi scheme was; it is more a case of "intellectual fraud," of people believing a lie but thinking it is true. (People genuflecting to a King was intellectual fraud, people trying to turn lead into gold was intellectual fraud. Intellectual fraud is very common. Making 2+2=5 is intellectual fraud, too. if that is true, then 5=2+2. If you play, they you will eventually lose.)

Besides that, everything is a zero-sum game. Whatever you do to others they will do to you. Hence 9/11.
Just because something is "legal" doesn't mean it is a good idea.

"The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." - Marcus Aurelius (ie Think Different)

[Koodari]

Originally Posted by SteveC Stock prices are not determined by what a company does or doesn't do; stock prices are based on expectations. If a company makes "less than expected" it stocks can go up or down, regardless of its profitability. Similarly, a company can lose money (Amazon) and its stock continue to climb.

Which doesn't make stocks any more of a zero sum game.

Do you have a beef with buy and hold investing too?

[torifile]

SteveC, please save your political views for a thread that calls for them. Your posts are completely off topic in here.

[SteveC]

Originally Posted by torifile SteveC, please save your political views for a thread that calls for them. Your posts are completely off topic in here.

I would buy stock in the subprime mortgage market, and keep track of it on a Windows machine for maximum pleasure. :-) Now's the time to "buy low." 2+2=0 The ponzi scheme is in trouble, again.

Don't say that I didn't try to warn you, but if you want a Mac program, there is this guy:
http://www.linnsoft.com/updates/

And it even comes with a monthly subscription, so you can spend money watching your money move up and down.

or this guy, who only whacks you for $25
http://www.barereef.com/mystock.php

Both seem to be very serious programs for number-watching. Personally, I prefer-girl watching or bird-watching to number-watching. There is much more to life than money, as we all eventually discover. Even Scrooge eventually came to realize his mistakes. All easy gain is somebody's pain, and it eventually comes back around again. We are what we choose to do, and what we do to others we do to ourselves.

Most men, even in this comparatively free country, through mere ignorance and mistake, are so occupied with the factitious cares and superfluously coarse labors of life that its finer fruits cannot be plucked by them. Their fingers, from excessive toil, are too clumsy and tremble too much for that. Actually, the laboring man has not leisure for a true integrity day by day; he cannot afford to sustain the manliest relations to men; his labor would be depreciated in the market. He has no time to be anything but a machine. How can he remember well his ignorance — which his growth requires — who has so often to use his knowledge? We should feed and clothe him gratuitously sometimes, and recruit him with our cordials, before we judge of him. The finest qualities of our nature, like the bloom on fruits, can be preserved only by the most delicate handling. Yet we do not treat ourselves nor one another thus tenderly. - Thoreau

[torifile]

All easy gain is somebody's pain, and it eventually comes back around again.

Not really. Stocks can go up just based on how well a company sells products. You know, there are companies that don't just exist to rip people off. Apple, for instance, sells things that people want to buy. You know, things that make people enjoy life a bit more.

[SteveC]

Originally Posted by torifile Not really. Stocks can go up just based on how well a company sells products. You know, there are companies that don't just exist to rip people off. Apple, for instance, sells things that people want to buy. You know, things that make people enjoy life a bit more.

With the exception of corrupt Directors, (lots of examples of those) the people doing the "ripping-off" is the investors, not the company or its employees.

ALL INVESTORS ARE PREDATORS, sucking the life of perfectly good companies and making themselves a burden on the employees, who must do the work that profits investors.

In an Orwellian twist, people now work for a public company and buy stocks in other public companies (or their own.) They are essentially making themselves slaves of themselves by proxy.

It's rather bizarre, but that is what the love of money creates. People make money by being a predator, and then lose it all to another predator. Stocks going up is just smoke and mirrors. It is a way to entice the innocent and unawares.

Locally, a CFO of a small company bought 10,000 shares on Monday morning at $26.00 a share, and sold them that afternoon at $43.00 a share. While he netted himself a cool $170,000.00, that money had to come from somewhere. Where it came from is obvious: other investors, employees, vendors, or customers. There is nowhere else for the money to flow "from."

Where money comes from is as important as where it goes. It's like the Catholic Church taking Mafia money, except people do it individually, and the government encourages it.

It is crazy for working people to work, scrimp and save and then give their money to a ponzi scheme. All the gains are an illusion, and the consequences of this habit are horrific, not just in driving inflation, but the way it tears the social fabric and inevitably leads to war.

Kids are graduating college with debts the size of a home mortgage, yet we are encouraging 7 year olds to start investing so they can afford college. High prices, high debt, and extremes of wealth are not a system that can sustain itself forever.

Of course, you are right about enjoying life. That is important, too. Ignorance is bliss, while it lasts. From the Roaring 20's to the Great Depression to World War. A tool will never be smarter than the person who wields it. The same is true for computers as bombs as money.

[Koodari]

Originally Posted by SteveC With the exception of corrupt Directors, (lots of examples of those) the people doing the "ripping-off" is the investors, not the company or its employees.

Take the simple case of one person owning a company. The company employs one person for a monthly wage. It has one customer who buys individual products with cash money. Who's getting ripped off? How?

ALL INVESTORS ARE PREDATORS, sucking the life of perfectly good companies and making themselves a burden on the employees, who must do the work that profits investors. In an Orwellian twist, people now work for a public company and buy stocks in other public companies (or their own.) They are essentially making themselves slaves of themselves by proxy.

Last I heard, working = selling your time for money. Not signing up for slavery.

What should the employees be doing if not that which makes the company most profitable?

It is crazy for working people to work, scrimp and save and then give their money to a ponzi scheme. All the gains are an illusion, and the consequences of this habit are horrific, not just in driving inflation, but the way it tears the social fabric and inevitably leads to war.

With the amount of money remaining constant, production of more stuff means there is more stuff per unit of money than before. Production drives deflation, not inflation.

[chucker]

Originally Posted by SteveC All the gains are an illusion

Right. I guess our Nokia stock gains that ultimately went into building a new bathroom were just an illusion. It's still the same ol' bathroom, man!

[bassplayinMacFiend]

Originally Posted by chucker Right. I guess our Nokia stock gains that ultimately went into building a new bathroom were just an illusion. It's still the same ol' bathroom, man!

Actually, you're peeing in the hamper now. Once the drugs wear off you'll see you have lots of cleanup to do.

[torifile]

Man, SteveC, I'm pretty darned liberal in my economic views, but you're just plain NUTS.

[SteveC]

Originally Posted by torifile Man, SteveC, I'm pretty darned liberal in my economic views, but you're just plain NUTS.

Have you ever played Monopoly? Everyone makes the same amount of money ($200 for passing GO.) It could just as easily be a model of "the communist ideal" as capitalism (buying and selling.)

Actually, it isn't meant to be either; it is intended to demonstrate the ideas of a guy named Henry George

http://en.wikipedia.org/wiki/Henry_George

Henry George was on the right track. In Monopoly, everyone ends up bankrupt. Nobody cheats to make that happen, it is just a mathematical phenomenon. (It's supposed to be hard to argue with math, right?) But Henry George missed a couple of important things. While he is right about the value of land (deeds) and rent driving everyone into bankruptcy, it is actually more simple than that. (Or complicated, depending upon your perspective.)

Originally Posted by Koodari With the amount of money remaining constant, production of more stuff means there is more stuff per unit of money than before. Production drives deflation, not inflation.

Ah, but the amount of money does not remain constant. That is part of the problem. Even when we were *not* using paper money, the amount of money (value) was not constant. But given the rise of industrialism, inflation should be impossible according to established theory. Yet, we have inflation and even huge corporations are in debt, just like in Monopoly. In Monopoly, the game ends, but in reality the wealth just continues to concentrate and move around as the amount of "value" increases. For example, a school building today costs more than the Louisiana Purchase, and for the most part we are still teaching the same untrue ideas as 300 years ago, as if we have no experience to the contrary.

What Henry George described he wrote 100 years ago, based on what he observed. We have far more data than he did, yet even his ideas are misunderstood or ignored. I'm not really a radical (I've owned a small business for 20 years,) but I do have an idea of what is going on. How many people really understand what is going on in Monopoly? People just want to win, and then don't go any deeper.

Pride comes before the fall. When things are going good, people think it will last forever. But the reality is that we are braiding our own noose (or our children's.) We have all been taught the same lies, so I know what I am saying seems crazy at first. But I'm not. I Think Different because I think. I speak because I figured out where the trigger is. It isn't just investing, but if everyone stopped investing we would all be better off. Massively better off! (Loan money, give money, but don't invest it.) What is regarded as commonsense is total nonsense, and we all know the math in Monopoly: everybody has to lose. Those are the rules we are using, but the problem now is that it is a habit, and where it used to be only a few people doing it, now everybody is doing it.

Look at the Stock Market this week. The bankers and politicians don't know what to do. They are too afraid to change, and too sure of what they believe.

The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man. -George Bernard Shaw

[torifile]

Steve, enough of this shit. You've derailed this thread already. I'm not going to argue with you about it because you've obviously thought way more about it than I have but this thread isn't the place for it anyway.

[SteveC]

Originally Posted by torifile Steve, enough of this shit. You've derailed this thread already. I'm not going to argue with you about it because you've obviously thought way more about it than I have but this thread isn't the place for it anyway.

Maybe. Maybe not. When somebody wants software so they can "track" their life's savings, it is an indicator that they will soon dissapear in a con game. Like an elderly lady coming to the bank to withdraw $10,000.00 in cash, the banker should know something is up and ask questions.

Of course, it is her money, and she is free to do whatever she wishes with it. And I realize that bankers are now part of the con game, (aren't we all?) so perhaps that is a bad example, but to not warn people when the danger is obvious would be irresponsible. I could tell you many stories of people losing everything "legally" because they believed in lies. It's just a question of time.

"Let the buyer beware."
"A fool and his money are quickly parted."
"Who ya gonna believe - me, or your own two eyes?" - Groucho Marx
etc.

If you have extra cash, pay down your own debts, don't play the ponzi game. You will be far better off in the long run, directly and indirectly.

[cosus]

You realize investors don't suck a company dry... companies work for their investors. If a company does well, one only sells if they need to.

[chucker]

Originally Posted by SteveC When somebody wants software so they can "track" their life's savings, it is an indicator that they will soon dissapear in a con game.

You have a serious problem, man.

[thegeriatric]

Originally Posted by torifile Man, SteveC, I'm pretty darned liberal in my economic views, but you're just plain NUTS.

Well i wouldn't put it quite this strongly. But..............................

Originally Posted by chucker You have a serious problem, man.

I agree with chucker.

[torifile]

When somebody wants software so they can "track" their life's savings, it is an indicator that they will soon dissapear in a con game

You're such a drama queen!

to not warn people when the danger is obvious would be irresponsible.

You've done it already. So please shut up now.

On second thought:

I could tell you many stories of people losing everything "legally" because they believed in lies.

Yeah? Please do.

[Koodari]

Originally Posted by torifile Yeah? Please do.

Actually I don't see how that would help. Investing and entrepreneurship is all about acceptance of risk. Even where someone comes out behind, they might well take the same risk again, because the expected value is good enough. Hearing about individual cases where someone simply lost money means nothing.

What *I* would like to hear from SteveC is what specific mechanisms allow some players in the economic field to fleece others legally.

Maybe if I learned that, I could avoid it, or could do it myself.

Now all we're getting is "STOCKS ARE EVIL! THE END IS NEAR! REPENT!". This is supposed to persuade me how?

[torifile]

Actually I don't see how that would help. Investing and entrepreneurship is all about acceptance of risk. Even where someone comes out behind, they might well take the same risk again, because the expected value is good enough. Hearing about individual cases where someone simply lost money means nothing.

My point was that his statement was likely bullshit or something that any of us could just google. He's full of it. As I said earlier in that post, he's a drama queen.

[SteveC]

LOL Always the crazy ones are greeted the same way.

Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules. And they have no respect for the status quo. You can praise them, disagree with them, quote them, disbelieve them, glorify them or vilify them. About the only thing you can't do is ignore them. Because they change things. They invent. They imagine. They heal. They explore. They create. They inspire. They push the human race forward. Maybe they have to be crazy. How else can you stare at an empty canvas and see a work of art? Or sit in silence and hear a song that's never been written? Or gaze at a red planet and see a laboratory on wheels? We make tools for these kinds of people. While some see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.

[SteveC]

Originally Posted by Koodari Investing and entrepreneurship is all about acceptance of risk.

There is no risk in a zero-sum game. The outcome is pre-determined.

The great irony is that people think they have free-will where they don't, and don't think they have freewill where they do.

All the world is a stage. If you play a certain role, then the outcome will inevitably follow. Once you create a new government, and structure it with prevailing contradictions, the problems caused by the previous contradictions return. Just as people end up poor attempting to be rich, others end up enslaved trying to be free.

In any case, you are free to work hard, save your money, and then give it to someone who promises you that 2+2=5. Just don't be surprised if he keeps some for himself, and then tells you that 5=2+1.

For an entrepreneur, 2+2=5 is the lifeblood of the company (profit) but it is still a zero sum game. The profit you create comes back as your own expense. When the oil companies raise their prices and make record profits, then everyone raises their prices, too, which simply drives up the oil company's overhead. The "Monopoly Effect" is unavoidable, and the spiraling inflation with it. Both investors and entrepreneurs biggest risk is from themselves.

Ah, the mirror is a treacherous place, isn't it? Nothing is more scary than our own reflection. Nothing is more difficult to change and improve than the one thing we have absolute power over: ourselves.

[BenP]

SteveC, where the hell did you get the idea that it's a "zero-sum game"? Most publicly traded companies exist to create value for an investor. If it's a zero-sum game, how has the standard of living and level of human development increased over time?

You sure do know a lot of clichés, though.

[torifile]

Originally Posted by BenP SteveC, where the hell did you get the idea that it's a "zero-sum game"? Most publicly traded companies exist to create value for an investor. If it's a zero-sum game, how has the standard of living and level of human development increased over time? You sure do know a lot of clichés, though.

Exactly. In Monopoly, more money is injected into the "economy" as the game progresses - each time a player passes Go, they collect $200. There's not a cap or limit on what's in the economy and now that information has value, we're not limited by finite resources, either.

[torifile]

Originally Posted by SteveC LOL Always the crazy ones are greeted the same way.

Just because all the crazy ones get the same greeting, doesn't mean that all the crazy ones are actually innovators. You know "all squares are rectangles but not all rectangles are squares" and all that.

[SteveC]

Originally Posted by torifile Exactly. In Monopoly, more money is injected into the "economy" as the game progresses - each time a player passes Go, they collect $200. There's not a cap or limit on what's in the economy and now that information has value, we're not limited by finite resources, either.

In the beginning of the game everyone is getting richer, because "the bank" is pumping money into everybody's hands. But then a tipping point occurs after the game has developed for awhile, and then everybody gets progressively poorer as one person gets progressively richer. (In modern times that would be Bill Gates, but it could have just as easily been Steve Jobs, had Stevie understood a few basic things.)

However, Monopoly isn't a perfect model of reality. In reality we have new players entering who must go into debt to play. Nobody is going to give them $200 just for showing up. Every new generation is borrowing to purchase the land that belongs to the previous generation. Even though the land has existed for billions of years, every generation is expected to work for 30 or 40 years to own their own piece of it. This is an improvement over the Lords owning the peasants and all the land, but not much. The mass of people are equally enslaved by a biased and stupid "social contract."

We are all a "new" generation, until we start acting like the "old" generation. The ability to invest means we have "made it," and so the prey evolves into the predator.

What there is no "cap" on is inflation. Wealth is an illusion, but not the goods, obviously. (The landfills are full of "goods.") Just like in Monopoly, the value of everything keeps rising. People own more, and what they own (and buy) is constantly increasing in cost. So while they are getting richer, they are simultaneously getting poorer, unable to keep up. (Which is why you constantly have seniors complaining about taxes and how they live on fixed incomes, etc. They are inheriting the errors they created.) When we are younger (the beginning of the game,) credit (debt) becomes a substitute for income, and expenses go up along with income. But the only way to pay off the debt on the money we borrowed for our mortgage is to profit from somebody else. (The flip from prey to predator is murky, since we never stopped being preyed upon by others. Everybody is stuck in the middle, getting as good as they are giving; hence the age-old admonishments about The Golden Rule.)

As kids, we didn't understand money. As adults, we simply repeat the mistakes of our parents, who similarly did not understand the consequences of their choices. (All progress requires doing things differently than the previous generation, but without making things worse, which sometimes happens, too.)

Go play a few games of monopoly, but look at what is happening with different eyes. Watch how the money flows, how people seem to be getting richer, and then everything starts to collapse. And then you will see what a farce what is going on in the news reports about foreclosures, stocks, etc., really is. Get out while you can.

[torifile]

Steve, can you move away from the platitudes and make a coherent argument? You use nice abstract phrases - the prey becomes the predator, etc. - without really providing any examples of what the hell you're actually talking about.

As adults, we simply repeat the mistakes of our parents, who similarly did not understand the consequences of their choices. (All progress requires doing things differently than the previous generation, but without making things worse, which sometimes happens, too.)

So we haven't made progress over the generations?

This is an improvement over the Lords owning the peasants and all the land, but not much.

So have we made progress or haven't we?

Tell me how we're not better off now than 100 years ago. In real terms, not in cliches and platitudes, if you can.

[SteveC]

torifile, the economy is a zero-sum game. If you make money without doing any work (investing,) then somewhere somebody is your slave. In all probability, that slave is also yourself, because we are all producers, consumers and money manipulators. Even if we are self-employed, we are still working for somebody.

Everybody, myself included, sells to people richer than themselves, and takes advantage of people poorer than themselves. So far, I have simply described reality the way it "is," I haven't said anything about how to fix it, beyond suggesting that investing is self-defeating.

Progress is always a relative term. Every generation feels itself to be more technologically advanced than the previous generation. Because of the nature of inflation, any book of numbers and statistics is always fraught with misinterpretation. (Like Monopoly, if you only look at the beginning of the game, and not the end, you don't get the whole picture.) Politically, problems have endured in many areas. Everything that was wrong under the Articles of Confederation has endured under a central government, but now the problems are even harder to fix. Similarly, the problems under monarchy have endured under democracy, communism, socialism, tyranny, etc.

Why? Because everyone things about and uses money the same way, both across time and across political systems. It is exactly what people have been indoctrinated to believe about money (profit, investing, etc) that they should not do.

Go play a few games of Monopoly, and then come back and tell me what you saw and why it occurred. Science is the study of cause and effect. Monopoly isn't a game, it is a failed social experiment.

[digitalprimate]

So maybe let's call this thread one big rant to let off some steam...

I think it's mixing macro-economics with micro-economics like there's no tomorrow (or respect for shades of gray).