tag:blogger.com,1999:blog-8358039.post3819493909668286044..comments2024-03-15T13:43:53.439-07:00Comments on Captain Capitalism: Why You Really Aren't "Investing" In the Stock MarketCaptain Capitalismhttp://www.blogger.com/profile/05620212946121617985noreply@blogger.comBlogger13125tag:blogger.com,1999:blog-8358039.post-17923231672481006382014-08-07T08:23:59.126-07:002014-08-07T08:23:59.126-07:00Pretty much mirrors something I wrote as a comment...Pretty much mirrors something I wrote as a comment to another post of yours. These days, the IPO usually is just a way for the initial investors to sell their shares. <br /><br />That's why we call the stock market a secondary market. <br /><br />It may sound like a game of semantics, but it isn't. People who think of themselves as investors usually have a harder time bailing on their stock holdings - that's why most retail "investors" exit somewhere near the bottom and the professionals make most of the money in the stock market. <br /><br />Speculation isn't a dirty word in my book (neither is trading). Every business venture has a certain amount of speculation in it. You can't tell the future after all. Nilsnoreply@blogger.comtag:blogger.com,1999:blog-8358039.post-47154452034935465782014-08-02T12:10:23.726-07:002014-08-02T12:10:23.726-07:00Grey enlightenment:
Recent IPOs have been falling...Grey enlightenment:<br /><br />Recent IPOs have been falling on their face.<br /><br />Seriously, hedge with stuff that will ride through a crash.<br /><br />Winter is coming.Kristophrhttps://www.blogger.com/profile/08370888276707569365noreply@blogger.comtag:blogger.com,1999:blog-8358039.post-69854592240827492014-08-02T08:25:06.211-07:002014-08-02T08:25:06.211-07:00Google IPO $80 now $1100
Facebook IPO $38 now $73
...Google IPO $80 now $1100<br />Facebook IPO $38 now $73<br />Linkedin IPO $40 now $200<br /><br />and many more<br /><br />There's always going to be risk, but its not a rigged game nor a bubble or a crisis waiting to happen. <br /><br />Plenty of people, myself included, have made good money with stocksGrey Enlightenmenthttp://greyenlightenment.com/noreply@blogger.comtag:blogger.com,1999:blog-8358039.post-33754571201477850182014-08-02T05:44:21.883-07:002014-08-02T05:44:21.883-07:00Capital is productive, not just when it is bought....Capital is productive, not just when it is bought. You buy it for its long term productivity (of course, it wears out and needs to be replenished). Thus the concept of dividends - the production from capital gives surplus value which can be given back to the shareholders.<br /><br />Also, when......wait, the dividend ratio of the S&P500 was what, you said? 2%? So.....<br /><br />Nevermind, this comment is superfluous. Carry on.Hanshttps://www.blogger.com/profile/14935613031753433107noreply@blogger.comtag:blogger.com,1999:blog-8358039.post-69546748387380240882014-08-02T04:40:29.357-07:002014-08-02T04:40:29.357-07:00So the question that inquiring minds want to know ...So the question that inquiring minds want to know is, aside from unpredictable Black Swan, what economic events/trends will result in a major market pullback - either suddenly or over several months? Some say it with be the retiring boomers drawing down their 401K's (them that's got 'em). Some say it will be when the Fed can no longer keep interest rates artificially low - although they'll probably do that as long as they can. Any thoughts as to what and when?Robert What?https://www.blogger.com/profile/03863449539859132763noreply@blogger.comtag:blogger.com,1999:blog-8358039.post-57135524938109122432014-08-01T18:33:54.577-07:002014-08-01T18:33:54.577-07:00Hey Cappy. What do you think of the newly appointe...Hey Cappy. What do you think of the newly appointed Admiral Howard. <br />Do you think she actually earned the job on her own merit? Or do you think affirmative action had something to do with it?<br /><br />http://en.wikipedia.org/wiki/Michelle_J._HowardAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8358039.post-81650343886923676162014-08-01T17:57:30.156-07:002014-08-01T17:57:30.156-07:00Just to echo some of the other posters, companies ...Just to echo some of the other posters, companies use stock in several ways.<br /><br />* Employees, particularly some executives, are partially paid in stock, often through long-term incentives. Without stock, it would drain cash from operating income. <br /><br />* Acquisitions of other companies are often funded with stock. Like an IPO, this pays back the original investors, who can fund new ventures. <br /><br />* Companies issue treasury stock to expand or pay other obligations. Within the past year, at least one casino firm has raised considerable cash with which to reduce the number of outstanding bonds. <br /><br />That said, many stocks are overvalued and it may be better to buy bonds until that changes. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8358039.post-86027184742991470382014-08-01T12:30:11.540-07:002014-08-01T12:30:11.540-07:00@ your comment "This time it's different?...@ your comment "This time it's different?!"<br /><br />No. It's no different than it's ever been. And the fact is that our stock market has CYCLES. Anyone with a background in economics knows that business cycles/short term debt cycles etc. affect the economy. Always has, always will.<br /><br />The stock market apprx 6 years ago fell off a cliff. The SP500 lost 50% of it's MARKET value. Did anyone really believe that the actual earning power of those companies fell by half? The fundamentals would prove otherwise. <br /><br />The market is currently near an all time high - money is finding it's way into the market, and the p/e of the SP500 is at a ratio of around 20. Not cheap, but nowhere near the overvaluations we saw during the tech bubble.<br /><br />It's currently business as usual for the stock market.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8358039.post-37090669664673668012014-08-01T10:44:02.629-07:002014-08-01T10:44:02.629-07:00Hedge your IRA. All "investments" are st...Hedge your IRA. All "investments" are stupidly dangerous in the face of currency mismanagement.<br /><br />http://goldsilver.com/ira/Kristophrhttps://www.blogger.com/profile/08370888276707569365noreply@blogger.comtag:blogger.com,1999:blog-8358039.post-81420941591171228502014-08-01T10:19:24.310-07:002014-08-01T10:19:24.310-07:00Most of your advice is rock solid, Cap. I think y...Most of your advice is rock solid, Cap. I think you should read "A Random Walk Down Wall Street" and see if it changes your mind on this issue. My own experience with index funds suggests your wrong. The best way to stick it to these elites and globo corps is to achieve financial independence from them. In addition to minimalism, having a nest egg is a huge component of financial independence.PRCDnoreply@blogger.comtag:blogger.com,1999:blog-8358039.post-25692555684981625242014-08-01T05:18:56.863-07:002014-08-01T05:18:56.863-07:00It still is an investment, because you get dividen...It still is an investment, because you get dividends. That makes a stock a productive asset. There may be better investments out there--I'm doing pretty well with peer to peer lending and rental properties--but it doesn't mean it isn't one at all. Gold is speculating. It doesn't generate anything new. Companies do.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8358039.post-76339132869963622742014-08-01T05:16:44.981-07:002014-08-01T05:16:44.981-07:00The problem with this line of thought is the impli...The problem with this line of thought is the implicit assumption that only IPO matters. That is simply not accurate as successful companies continue to expand and issue new stock or borrow money for leverage opportunities as their operations continue.<br /><br />Even though the secondary stock trades (those made between stock traders after the initial offering) is not actually going into the business, the business will have more or less financial muscle to expand depending on if those trades are going for more money or less money. Their ability to expand and borrow cash is tied to their stock price even if subsequent trades are not going directly to their bank account.<br /><br />I agree stocks can become overvalued but the idea that you are not fundamentally improving a company's potential to create more economic value by buying its stock is not a correct statement. Perhaps it is not "investing" but it's not pointless either.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8358039.post-78585934388543876462014-08-01T05:04:33.713-07:002014-08-01T05:04:33.713-07:00"Once that happens those shares are no longer..."Once that happens those shares are no longer actual 'investments.' They are merely speculation."<br /><br />As speculation, it's worth taking your gains early, hence why you want to sell these not-really-investments so you can continue to speculate.<br /><br />The over-reliance on speculation is merely a symptom of "lazy investors" who won't create companies, products, or things that are worth investing in.<br /><br />Want an investment? Put some money behind a plumber or electrician friend so he can expand the business.<br /><br />Want a speculation? You may as well be putting money into the forex markets, essentially a zero-sum game, since you might actually be luckier at out-guessing micro-trading platforms because banks tend to do unpredictable things.<br /><br />I'd be happy if lazy American mutual fund and speculation package holders would kindly stop referring to their speculative activity as "investment", because as you rightly point out, it isn't.<br /><br />You'd think that for all this speculative activity, some of these people would have heard of the "Zurich Axioms", but usually they haven't ...Jonesnoreply@blogger.com