That is correct, even when it has been very clear that many of them belong to the mental type.
And many of the small potatoes are institutionalized after the reaping. It is really sad to witness so many willingly volunteer to maintain required fresh meat supply.
Doesn't that ignore the amount of stock buyback/reinvestment companies do off their revenues? That's a huge amount of cash injection into the market.
The company I worked at pumped their stock price up from $14 to $120 over a 3 year period.
The technique is to issue stock to execs and then buy back at inflated prices to drive up mkt valuation. The real output of the firm for the most part hardly changes. The virtual economy vs the real economy.
All the listed companies are at it.
The technique is to issue stock to execs and then buy back at inflated prices to drive up mkt valuation. The real output of the firm for the most part hardly changes. The virtual economy vs the real economy.
All the listed companies are at it.
Options and futures can be a non-zero sum game between a seller and a buyer (meaning there are scenarios in which both win or lose, off topic how) but if you look at all the traders and investors out there as an aggregate, trading is a zero-sum game (well, "almost" due to costs associated with transaction, money that leaks outside the stock market).
A company buying back its own shares is not a true mark to market event to any shareholder. It is only a nudge to investors to re-evaluate their stance on the company, but no event in the public markets will force prevailing security prices to a fair value. Not relying on mark to market events, however, investors are essentially betting on other investors in the market to agree with them as future events materialize and is incorporated in the stock price. OTOH, buying back also means less dividends to shareholders (which are actually the investors), so less money to re-invest on the market. Still a zero sum game, IMO.
But I believe (intuitively) that the huge markets volatility is indeed because of the huge amount of (almost) free money that FED prints and hands over as bailouts. reliefs, quantitative easing, you name it. Due to the FED printing machines, the risks for the big players decreased significantly, so they can afford to play the options/futures game. If I recall correctly, the futures market was originally intended for farmers to evaluate the prices in the next crop, look where it got today. Perhaps evaluating the next crop of suckers
.
Considering stock trades as a "zero sum game" ignores the most important factor in investing...time. If I buy a share at $10, hold it for 30 years and sell it and it's reinvested dividends for $100 to a young person who holds it for another 30 years and sells it and it's reinvested dividends for $1,000 the sums aren't zero and there is no loser. The transaction may be zero sum at the instant that it occurs while being wise, appropriate and timely for the both the buyer and the seller.
^^^
Of course, as much as any passive market index investors, they are not in a zero-sum game. These investors are not competing with one another and all will receive the market return.
But the discussion was about the options/future market, and that is a zero sum game.
Of course, as much as any passive market index investors, they are not in a zero-sum game. These investors are not competing with one another and all will receive the market return.
But the discussion was about the options/future market, and that is a zero sum game.
You do understand your mutual fund managers are able to short stocks too? They will never admit to it tho. A gain at any cost is a gain. They jump in and out of stocks more than they let on, and gamble with your money. They also charge a percentage of your assets you whether they make you money or lose your money.
I would consider buying and holding 10 -15 diversified individual stocks to be more investing than gambling in your example. Call a 20 year Apple Stock holder a gambler an he may laugh at you. A lot.
If you don't know what you are doing in the market, there are better options than mutual funds. Mutual Funds compare their annual performance against the S&P and barely beat it. You can "Have" the S&P performance by just buying S&P Depository Receipts (SPDR). You wont have that end load, front load, this load, that load, hidden fees, as your not paying anyone to shuffle the stock portfolio, as you have all the S&P companies, all the time.
Try this - pick a winning S&P year. Did your mutual fund beat it's performance? Not many do. Now pick a losing S&P year. I bet you did just as bad (or maybe worse). See what I mean? This is what your paying that mutual fund manager for.
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Ah, the nearest I had got was peat-sets-shreeder. Close, but no banana 🙂
Aside, I though it was nice when audi restyled their whole range to have goatee beards like their boss.
Interesting. As I’m reading this, adverts are coming up for stock market investing.
‘Start Trading’
‘lowest ever spreads’
‘Start Trading’
‘lowest ever spreads’
Yes, the recent frequency of adds reminds me of the peak of the Dot.com bubble.
The S&P500 P/E ratio history looks similar too.
The market is out of whack.
The S&P500 P/E ratio history looks similar too.
The market is out of whack.
Interesting explanation of the story behind what's currently happening with "GME".
A bit of background on the gamestop story - Album on Imgur
A bit of background on the gamestop story - Album on Imgur
Vanguard Total Stock Market Index Admiral Shares (VTSAX): No front end load, no back end load, no transaction fees, 0.04% annual expense ratio.
Picking the wrong mutual fund isn't gambling, it's just dumb.
Observing all this stuff happening elsewhere is interesting (I am in Australia). Over here most companies on the stock exchange offer dividends to shareholders from a portion of the annual profit. The dividend is the inducement to buy that stock - in addition to the hope of the stock price rising (most of the time anyway).
So the result is my retirement savings are increasing with less vulnerability to the overall market ups and downs.
So the result is my retirement savings are increasing with less vulnerability to the overall market ups and downs.
Heh, no, not a Groningen tulips, but natural gas.
Since we talking about global markets disease it seemed to me that this sample can show the danger of unsecured money.
Cash inflow mostly like to lowering rates.
Another way to think about this...
Especially with growth stocks, companies do not offer dividends because they want to re-invest their income into expanding the business. This is fair enough. In this case, instead of receiving a cash dividend, the shareholder should see a capital gain by increased share price (BTW this may be more tax efficient for the shareholder too). It is then up to the shareholder whether they "take the dividend" by selling shares or passively allow the company to reinvest all their "dividends".
That serves the dutch economy for some odd 50 years now as a serious booster. About to cease in the next decades.
This Gamestop Squeeze reminds me a bit of OPEC.
All countries meet and agree to production cuts to support a certain price, and then a few countries cheat, and sell more than agreed, then all cheat and supply more than agreed, driving the price down, all due to greed.
As far as Gamestop - all agreed to $1000 or $.01, and price drives higher, then some get the "Greed Bug" (same bug that the Hedge Funds Managers, and OPEC countries had), and surreptitiously sell...next thing you know its back down to $17 and the last remaining hold outs (or those not fully understanding what is happening) are left with nasty losses.
Already down 20% today.
And what will we have learned here?
All countries meet and agree to production cuts to support a certain price, and then a few countries cheat, and sell more than agreed, then all cheat and supply more than agreed, driving the price down, all due to greed.
As far as Gamestop - all agreed to $1000 or $.01, and price drives higher, then some get the "Greed Bug" (same bug that the Hedge Funds Managers, and OPEC countries had), and surreptitiously sell...next thing you know its back down to $17 and the last remaining hold outs (or those not fully understanding what is happening) are left with nasty losses.
Already down 20% today.
And what will we have learned here?