Home › Forums › Financial Markets/Economics › Something I read today!
- This topic has 9 replies, 7 voices, and was last updated 7 years, 9 months ago by
ucodegen.
-
AuthorPosts
-
January 22, 2017 at 5:34 PM #22253January 25, 2017 at 5:30 AM #805119
CA renter
ParticipantThis is why I would always shake my head when homeowners would talk about how much they were worth during the housing bubble. The minute they would all try to realize those gains, the money would disappear.
January 25, 2017 at 8:13 AM #805120spdrun
ParticipantWhy harsh? Evaporation of fake wealth is just an opportunity. Bonus points if it bankrupts some Trump supporters.
January 31, 2017 at 8:31 AM #805238Anonymous
Guest“As soon as sellers outnumber buyers…”
LOL!
January 31, 2017 at 8:51 AM #805239no_such_reality
ParticipantI tend to agree, overall the majority of stocks are all ‘growth’ stocks now where the investment return comes from the ponzi-esque more future buyers of the shares.
The only real question is over the long term, are there enough structure money flow into the system to maintain the float?
401K are feeding in, investors are feeding in, retirement plans are feeding in.
We talk about boomers retiring, but Millenials are even bigger. They’re feeding in, boomers are retiring, but the vast majority of the wealth is actually concentrated and that concentration isn’t going to drain their investments. The vast will drain their investments, but they have a pittance of the baby boomer wealth.
January 31, 2017 at 3:45 PM #805265ucodegen
Participant[quote=no_such_reality]I tend to agree, overall the majority of stocks are all ‘growth’ stocks now where the investment return comes from the ponzi-esque more future buyers of the shares.
The only real question is over the long term, are there enough structure money flow into the system to maintain the float?
401K are feeding in, investors are feeding in, retirement plans are feeding in.[/quote]
I would agree with this on ‘growth’ stocks that are not really showing any positive earnings and don’t seem to have any positive earnings on the horizon. It is kind of like speculating on when and ever if the company gets really large, gets positive earnings so that it can declare a dividend (if they ever do). Too many ‘ifs’.
[quote=no_such_reality]
We talk about boomers retiring, but Millenials are even bigger. They’re feeding in, boomers are retiring, but the vast majority of the wealth is actually concentrated and that concentration isn’t going to drain their investments. The vast will drain their investments, but they have a pittance of the baby boomer wealth.[/quote] The Millenials are hoping/relying on for a big inheritance from the Baby Boomer parents?January 31, 2017 at 4:33 PM #805267GuestSay that 10 million investors each own 100 shares of stock in a company. Then I pay $1 more than the last person for a share. As a result, the stock price goes up by $1 and all 10 million shareholders see their portfolios rise by $100. But did I just create $1 billion of wealth, the total of that increase? Of course not.
Ms. IQ’s argument here is horribly flawed. One person does not create wealth but entire economies do.
In her anecdote she ignores the seller who chose to sell at the price, and the entire market who chose not to bid higher or offer lower.
Wealth was created – by everyone in the system. And the amount of wealth created at the moment of the transaction was $1 billion, by definition.
January 31, 2017 at 4:40 PM #805269
svelteParticipantThe problem with the article is that you could say the same thing about any marketplace – not just stocks!
Used cars, house prices, anything that matches buyers and sellers.
We all constantly talk about the equity in our house. That’s no more than potential $$ based on what someone else paid for a similar house recently.
January 31, 2017 at 9:07 PM #805270moneymaker
ParticipantYes if one was well versed in mathematics one could calculate the theoretical value of a company if stock was sold to the last piece of stock but that would never really happen. Liquidation value is something that can be measured.Stock price times number of outstanding shares divided by liquidation value might be an interesting number.
January 31, 2017 at 9:49 PM #805271Participant[quote=moneymaker]Yes if one was well versed in mathematics one could calculate the theoretical value of a company if stock was sold to the last piece of stock but that would never really happen. Liquidation value is something that can be measured.Stock price times number of outstanding shares divided by liquidation value might be an interesting number.[/quote]
Book value multiple or Price to Book Ratio.http://people.stern.nyu.edu/adamodar/pdfiles/valn2ed/ch19.pdf
-
AuthorPosts
- You must be logged in to reply to this topic.