Crazy, crazy day on Wall Street!


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Money: Good idea or disaster waiting to happen?

 

On the one hand, monetary tokenization allows standardization of transactions, which is (or can be) a very good thing. On the other hand, such tokenization encourages everything to be reduced to a standardized transaction, which is a very bad thing. And of course, when you remove the direct value from a product or transaction by introducing a value representative that has no intrinsic value, then you allow all sorts of metavalue trading, which is EXACTLY what a stock market is. I don't see how this can be a good thing.

 

I wonder if Gödel's Theorem applies in the case of economies, where the seeds of their own destruction is inextricably woven into the very fabric of their existence. I think there has to be a better way, though that way might involve a Zion society and some sort of united order. Government-mandated communism is most certainly not that way.

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Somebody just made an obnoxious amount of money at the hands of others that think markets are an easy way to day trade and make $$$$ without earning it.  The sad thing is that many retired individuals living on fixed incomes will now have less to live on.

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Wait, why will some retired folks on fixed incomes have less?  Because they invested the grocery money in the stock market?  If that's what you mean, the sad thing is they didn't seek out competent advice, or chose to ignore it.

 

Any retired individual who is relying on the stock market to provide the means to live, needs a smack upside the head and a swift course in how to not be a financial idiot 101.  Fixed income struggling folks need almost-zero volatility.  Low risk bonds, govt backed securities and the like.  

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Somebody just made an obnoxious amount of money at the hands of others that think markets are an easy way to day trade and make $$$$ without earning it.  The sad thing is that many retired individuals living on fixed incomes will now have less to live on.

 

In addition to NT's post... make $$$ without earning it... dude, if you get an interest payment on your savings account, are you saying you didn't earn that?  Or, say you built a successful lemonade stand and so you gave it to your sister with the deal that she gives you 5 cents of every lemonade she sells, you go ride your bike every afternoon while your sister mans the lemonade stand and she gives you a buck at the end of the day, are you saying you didn't earn that?  Or how about she built the lemonade stand and now that it's a success you give her your $10 so she can buy more lemons with the deal that she gives you 5 cents of every dollar she makes out of those lemons... so you go riding on your bike and she comes to you and hands you a buck... you didn't earn that either?

 

Also, making money in the Stock Market is all about predictions.  It doesn't matter where the market is going - up or down - you can increase your retirement portfolio if you're paying attention.

Edited by anatess
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I have always thought the stock market a form of gambling. Sure, there is a lot of research that should be done to place your money in the best spot, but in the end...gambling IMO. 

 

I invested in a silver mine a while back based on the assumption that silver prices would rise. I did my research and the trend was after an election year silver prices go up. Also, the company was doing well. Shortly after I got in they found main silver vein and I was up at +55% at one point. The temptation was to get out since I was that far ahead. Hmmm, sounds like gambling to me. 

 

An environmental group illegally blocked further exploration and I was certain the company would overcome the issue but the stocks went to -20% of my original investment. So I doubled down and bought it even cheaper. They regained their ground to the point that I basically broke even and I cashed out. 

 

Short term or long term, there is a lot that can happen and most of it is completely out of your control. We invest based on best guess and research. In the end, you cross your fingers and hope for the best outcome. Gambling. 

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Gambling is creating risk where none would exist otherwise.

 

If you have money, you must chose what to do with it, and every decision carries risk.  You can't get rid of all of the risk to the value of the money you own.  Investing in the stock market is choosing one form of risk over another. 

 

Consider:

* If you have your money in a bank account insured by the FDIC, you still have inflation risk (because you're earning squat for interest).

 

* If you have your money buried in the back yard, there's the risk of theft, risk of currency devaluation, destruction by elements (if it's in paper money), risk you'll not be able to find it.

 

* IRAs and 401Ks deal with the risk of government taxation changes, not to mention the risk of whatever securities your account invests in.

 

* If you give all your money away just to prove me wrong, you've accepted the risk that you'll not be able to support yourself after you lose the ability to generate an income through the sweat of your brow.

Edited by NeuroTypical
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Somebody just made an obnoxious amount of money at the hands of others that think markets are an easy way to day trade and make $$$$ without earning it....

I know a very decent honorable man who daytrades. (He is my home teaching companion.) Why say he didn't earn it, when you don't know the work, investment in training, and focus that goes into it?

Is harnessing wind power, dams, or tides for electricity somehow also unethical and lazy?

Edited by hagoth
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I know a very decent honorable man who daytrades. (He is my home teaching companion.) Why say he didn't earn it, when you don't know the work, investment in training, and focus that goes into it?

Is harnessing wind power, dams, or tides for electricity somehow also unethical and lazy?

 

Yes! So is driving a car instead of a horse and cart...or better yet...walking everywhere!! Lazy, stinking motorists!

 

:banana:

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I know a very decent honorable man who daytrades. (He is my home teaching companion.) Why say he didn't earn it, when you don't know the work, investment in training, and focus that goes into it?

Is harnessing wind power, dams, or tides for electricity somehow also unethical and lazy?

I would argue that professional gamblers (those that play cards) no more gamble than those who play the stock market. They make a science out of an event that has many random events.

The gambling aspect that is bad is the addiction that can come with it-when it does people lose more than they bargained for.

 

I learned a long time ago, never play with money you can't afford to lose, 'cuz the markets will eat you up and spit you out alive and they don't care.

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Consider:

* If you have your money in a bank account insured by the FDIC, you still have inflation risk (because you're earning squat for interest).

 

This is the main reason why I believe our current monetary system to be immoral, evil, and bankrupt. The system is designed to encourage individuals to take risks they would not otherwise take. 

 

Our current monetary system is nothing but a very large social wealth transfer system from the poor to the super rich. The Fed prints money and through a series of machinations that money ends up with large commercial banks.  These large banks are the ones who have 1st access to the money so they are able to buy things very cheap prior to any inflation from new money. As they buy things very cheaply, they get more rich and acquire more stuff; by the time the new money gets to joe smoe the money has already circulated through the system and everything costs more; it isn't until joe smoe gets a wage raise that he "benefits" from the inflation. The only way smoe can keep up is by "investing" in high risk schemes such as the stock market where the commercial banks have a whole slew of individuals who's sole job is to get money from smoe to enrich themselves.

 

It is extremely corrupt and only benefits commercial banks, the government, and government contractors. This evil system enables the whole slew of immoral and bankrupt policies, the social welfare, the endless wars, the money dumped into the political system-it could not exist without this system of the Fed printing money.

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Somebody just made an obnoxious amount of money at the hands of others that think markets are an easy way to day trade and make $$$$ without earning it.  The sad thing is that many retired individuals living on fixed incomes will now have less to live on.

This is a seriously flawed statement. 

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Making money on the market is an interesting proposition. At the most basic level, it is investing in a business, no different from helping fund a fruit stand and taking 1% of the profits. But stock market investing quickly takes on a distinctly meta flavor, as becomes obvious in day trading. In such a case, it's purely a money equation; the nature of the investment becomes irrelevant.

 

But you can view even this as buy and selling insurance of a sort. You trade in options? Then with calls, you are essentially allowing people to buy insurance from you, then keeping their premium when the options expire uncalled. With puts, you are buying your own insurance.

 

Somehow that doesn't quite feel like working an honest day for an honest paycheck. But it does not feel dishonest, either. It just feels sort of cheap, like you're following the rules but not in the way they were intended. Honestly, the whole system of money -- our entire economic system -- often feels like that to me. I believe there must be something better waiting for us.

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The main reason why trading is not gambling is because there is PRODUCT.  Gambling has zero product.  You are basically putting your money for the sake of winning money.  This is not trading.  Trading is putting money to invest on a product - if there's no product, people go to jail.  You hope that the product is worth something at the end of the day.  In gambling - the win or loss is made by chance - even studying cards is studying chance.  In trading, the value of that product is not by chance... it is by intrinsic value to consumers.  You put your money (which represents your work) into the market through your belief that the product is of high value or of low value.  That money you put in the market produces work.

 

Therefore, there's no such thing as... if the product dips in value, I lose, otherwise, I win.  Rather, you can make money if the product dips in value by positioning your investment on the debit side (helping the company fund it's product by you putting in a loan for them), or you can make money if the product rises in value by positioning your money on the other side - having the company use your money.

 

How you make money is by knowing the product you are putting your money on so you know which side of the product you're going to put your work into.  If you don't know anything about the product, you shouldn't be putting your money in it because... you have no idea what you're doing and without knowledge, you are going to lose your investment.  This is true whether it is only one product or a basket of products such as mutual funds.

Edited by anatess
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In addition to NT's post... make $$$ without earning it... dude, if you get an interest payment on your savings account, are you saying you didn't earn that?  Or, say you built a successful lemonade stand and so you gave it to your sister with the deal that she gives you 5 cents of every lemonade she sells, you go ride your bike every afternoon while your sister mans the lemonade stand and she gives you a buck at the end of the day, are you saying you didn't earn that?  Or how about she built the lemonade stand and now that it's a success you give her your $10 so she can buy more lemons with the deal that she gives you 5 cents of every dollar she makes out of those lemons... so you go riding on your bike and she comes to you and hands you a buck... you didn't earn that either?

 

Also, making money in the Stock Market is all about predictions.  It doesn't matter where the market is going - up or down - you can increase your retirement portfolio if you're paying attention.

 

Just so you know - anciently interest made on money by definition was "fitly lucre".  And as a side note - one of the requirements of the Law Of Moses for the Jubilee year was that one would forgive all the money owed to them at that time.  This was according to that lessor law covenant with G-d than what we live today????

 

As near as I can understand - interest was one of the major demands and philosophies of ancient Babylon.   However, money gained in the stock marked is not actually contracted interest - it is an investment and investments have risks according to the particular investment.

 

Feel better now?

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The main reason why trading is not gambling is because there is PRODUCT.  Gambling has zero product.  You are basically putting your money for the sake of winning money.  This is not trading.  Trading is putting money to invest on a product - if there's no product, people go to jail.  

 

If that were only true.  For stocks, one simply has to make other people think there is a product (or at least a reasonable plan to create one). Plenty of online companies have existed that have produced nothing.  The stock market is very corrupt.

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If that were only true.  For stocks, one simply has to make other people think there is a product (or at least a reasonable plan to create one). Plenty of online companies have existed that have produced nothing.  The stock market is very corrupt.

 

Product doesn't have to be tangible or brick and mortar institutions - Facebook is a product because of its advertising avenue, for example.  It IPO'd very roughly - priced too high for its intrinsic value... but that's not necessarily corrupt - it is simply that people had a difficult time assigning monetary value to something like Facebook.  Facebook eventually stabilized after a few weeks of trading.

 

It is illegal to IPO without a product, online companies included - they instituted this law for online companies after the bubble in 2000.  Before then, internet technology was very new and not very well understood that people thought they had a product when a site made money - for example - this guy back in 1998 or so who built a webpage selling a million pixels for a buck each.  He made a million dollars from people who bought x number of pixels to put their clickable logos on it that routes to their own websites or to people who bought x number of pixels to say Will You Marry Me, etc.  They thought that had value until they realized, the only way people would go to that website is if the guy himself advertised his site to get traffic... which he never did, so his site made a million bucks for a dud product.  If he were to IPO (he didn't, by the way), he would have been able to get a bite before 2000.

 

These days, people are more tech savvy.  The million pixels guy is easy to spot these days.  But, even then, the value of a product is predicated by consumption.  If you're a trader and you are fooled by Ponzi type products and the like, then you might be one of those people who treat the stock market like a casino.

Edited by anatess
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I have about $300,000,000 in assets under management in my practice. The only formula I know of after being in  the business ( financial planner, stock broker, or whatever we call ourselves nowadays) for the past 26 years is very simple......time plus compounded interest and the ability to not freak out over short term market volatility will make you a successful investor.

 

That really is it in a nutshell. U.S. equities have averaged nearly 10% since 1925. So, $1000.00 invested in 1925 would be worth nearly $5,000,000 today. Just think of all the crazy world and economic events that have happened since then.....

 

Yeah that is 90 years, but even in the shorter stretches...say the last 25 years...still around 10%. The big losers were those who thought they were being safe and bought bonds (same time period 90 years, $1000 grew to about $350,000) or worse the dreaded CD buyers that swallow the FDIC safety tripe. 

 

Just remember, volatility is temporary....just like turbulence when flying. The magic really is time and not freaking out. ( and not owning foolishness).

 

And of course why do we invest? Because taxes and inflation destroy purchasing power and that is all money is really....is purchasing power. 

Edited by bytor2112
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Guest MormonGator

Actually the market is like a casino with the odds in your favor. I find gambling to be gravely immoral-I don't even buy lottery tickets. So no, the market isn't even close to gambling. 

 

I'm a moron who needs an abacus and all twelve fingers to do basic math. If I can figure this stuff out, anyone can 

Edited by MormonGator
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