You are really out there.Originally Posted by WrongVerb
You are really out there.
I don't think I'd classify it as screwing people over, but whatever. Either way you need both for the market to work.
I'm just going to chime in and say that I hate the entire idea and premise behind the stock market, and investing in companies.
Dom Heffner (10-19-2018)
I think once you are in the stock market you just sort of know what is going on and you have to say it beats not being there.
I prefer classic cars and guitars, but it is tough getting my wife to believe in that.
My issue is that people are making money, or losing money on speculation of someone else making money. A company could make profits in terms of in/out, but somehow the company loses value because they didn't MAKE ENOUGH MONEY according to Frank the Investor. It's the craziest stuff on the planet (ok, maybe not - but it's freaking wild).
Dom Heffner (10-19-2018)
Why?
Nah. I just don't value money and wealth like most people. It's sorta ingrained in my psyche that way. And from that position, investing capital into a company in order for it to grow and become more profitable, with the payoff of that investment coming in dividends seems like a really good idea. Someone betting that the value of that investment will go up and/or down, however, doesn't make any money if the investment stays stable. It's that secondary bet that I have a problem with.
Our planet is a lonely speck in the great enveloping cosmic dark. In our obscurity, in all this vastness, there is no hint that help will come from elsewhere to save us from ourselves. -- Carl Sagan (Pale Blue Dot)
https://m.youtube.com/watch?v=A1RrEph0SNo
What would you say.....ya do here?
Because you don’t understand how it really works. What is far more important is the value of a company, not how much money it makes. Of course, it needs to make money long term, but if a company can say that it has a great idea, and they don’t come off as crazy (hello Tesla), then investors will gladly give them money that the company can use to grow. And, even if they don’t make money, the actual value may still grow if their idea takes off, in which case it may be purchased by a larger company, when both the owners and investors make a profit. It’s good for everybody.
There is actually no other way this could possibly work, because companies need capital to grow. I’ve invested in small enterprises over the years on the side, and in all but two of them, I did very well. In fact, back in 1996 I did some work for a small company that had a very cool idea, and they needed some engineering help. They had no cash, so I did the work in exchange for stock options. They gave me what at the time was $30,000 in options, and it is now worth over $700,000. Of course, it could’ve gone completely south on me and I would’ve lost everything, but I did my homework and I believed in them. Worst case, I would just lose the time I spent with them.
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I missing the part where investing during volatile times means somebody is being screwed over.
How is it the only way it can work? Companies can grow organically.
What would you say.....ya do here?
I don't think Doug is going to be involved in exotic derivatives trading betting against the American economy.
But if the American economy IS (temporarily) going into the crapper due to no fault of my own, I can sleep sound profiting from it.
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Incredibly slowly. But debt is the other option. Riskier for the company, of course, but it IS an option. Generally, no one is going to lend to a company not throwing off free cash flow, though.
I absolutely understand how it really works.
Does a startup need some money to get going? Sure. It takes money to make money.
The entire idea that a company could, however, make $30M in profit in a quarter, for example, but the company loses value because you and your friends thought they were going to make $40M in profit that quarter, is bonkers kind of crazy.
The value of the company is based on speculation, not actual production. And that is wild. Companies losing money hand over fist are "worth more" than companies making tens millions of dollars a year.
Uh, then you DON'T know how it works. Fundamentally, a value of a company is the expected cash flows over time going to infinity. If the company was valued based on $40 million of profit expected, why do you think it's bonkers for the company to lose value if it only provides $30 million in the relevant quarter? It's the opposite of crazy.
No, you have no idea how it works. If a company told me they did the research and they were going to sell 1 million units of something and make x amount of dollars, but then they only sold 800,000 and made less, even though they were making a profit, I would think they didn’t know what they’re doing. Words matter.
You need to listen to people who have made money in the stock market and really understand it, and maybe you could make some money yourself. Or, you could start your own enterprise and raise capital. It just takes a good idea.
Who do you think the Reds should value more, Hunter Greene or Jared Hughes?
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