The Rich continue to get richer

[89coupe]

http://www.calgaryherald.com/news/Gallery+Canada+richest+people+including+Calgarian/4416552/story.html

[max_boost]

It's not fair!!!

[TorqueDog]

Good for them - can't begrudge anyone for making money, and they're in the financial positions they're in for a reason.

[Swank]

Dammit, I'm number 16 again :(

[creeper]

If you don't have a seat at the table, you're on the menu.

[Xtrema]

Takes money to make money.

Anyone who still got money to invest after the crash made it out like a bandit. So it's pretty normal for these folks.

[swak]

If there was a "MRU's Poorest Students" list, im sure id have a chance to make that list...

[1barA4]

Originally posted by Xtrema
Takes money to make money.

Anyone who still got money to invest after the crash made it out like a bandit. So it's pretty normal for these folks.

...or mad risk tolerance and luck.

One of my friends turned nothing into a million dollars (and his cheques from dividends alone is more than double my yearly salary now)...all he did was take a whole bunch of loans simultaneously so they didn't show up on his credit report when applying the next loan, open up a margin account and traded like a mofo.

Some research, good choices and a lot of luck, less than a year later, he's earned his million+ bucks. He could quit his job but why? He can trade while he works there and collects yet another income stream with minimal work.

Yes, I'm jelly.

[Q-TIP]

Originally posted by 1barA4


...or mad risk tolerance and luck.

One of my friends turned nothing into a million dollars (and his cheques from dividends alone is more than double my yearly salary now)...all he did was take a whole bunch of loans simultaneously so they didn't show up on his credit report when applying the next loan, open up a margin account and traded like a mofo.

Some research, good choices and a lot of luck, less than a year later, he's earned his million+ bucks. He could quit his job but why? He can trade while he works there and collects yet another income stream with minimal work.

Yes, I'm jelly.

That guy must go through toilets like nobody's business shitting that many horseshoes.

[msommers]

Originally posted by 1barA4


...or mad risk tolerance and luck.

One of my friends turned nothing into a million dollars (and his cheques from dividends alone is more than double my yearly salary now)...all he did was take a whole bunch of loans simultaneously so they didn't show up on his credit report when applying the next loan, open up a margin account and traded like a mofo.

Some research, good choices and a lot of luck, less than a year later, he's earned his million+ bucks. He could quit his job but why? He can trade while he works there and collects yet another income stream with minimal work.

Yes, I'm jelly.

Taking out simultaneous loans to invest? I do not have the balls. If shit hits the fan, that's life ruining!

[creeper]

Originally posted by msommers


Taking out simultaneous loans to invest? I do not have the balls. If shit hits the fan, that's life ruining!

Good on him, but wildly risky. Not within the suggested boundaries of "only trade what you can afford to lose".




:bigpimp: :bigpimp: :bigpimp:

[911fever]

Originally posted by 1barA4


...or mad risk tolerance and luck.

One of my friends turned nothing into a million dollars (and his cheques from dividends alone is more than double my yearly salary now)...all he did was take a whole bunch of loans simultaneously so they didn't show up on his credit report when applying the next loan, open up a margin account and traded like a mofo.

Some research, good choices and a lot of luck, less than a year later, he's earned his million+ bucks. He could quit his job but why? He can trade while he works there and collects yet another income stream with minimal work.

Yes, I'm jelly.

ridiculously lucky. 95% of 'stock traders' or daytraders break even or lose money.

[EK 2.0]

Without risk there is no reward....:bigpimp:

[Freeskier]

Lol, just have to walk down to a shelter in calgary and you can talk to the other 90% where that gamble didn't pay off.

[Graham_A_M]

Originally posted by 1barA4


...or mad risk tolerance and luck.

One of my friends turned nothing into a million dollars (and his cheques from dividends alone is more than double my yearly salary now)...all he did was take a whole bunch of loans simultaneously so they didn't show up on his credit report when applying the next loan, open up a margin account and traded like a mofo.

Some research, good choices and a lot of luck, less than a year later, he's earned his million+ bucks. He could quit his job but why? He can trade while he works there and collects yet another income stream with minimal work.

Yes, I'm jelly.

Hey if hes a numbers guru, even so much as Brett Wilson and knows WTF hes doing (I mean REALLY knows WTF hes doing) all the more power to him.

I think about 99.99 of society would have their lives ruined if they did that.

[ZenOps]

Risky.

But its really only in the US where you can take loans of that level, if you aren't already rich to start with. Noone will lend you money if you don't have assets to start with.

Canada has tighter restrictions. In China, you can own a house and a car and still not be able to get a loan. In the middle east, lending with interest is actually considered by some to be against the will of god.

In the US, if you borrow millions and then lose it - you just declare bankruptcy and call your lenders idiots for them trusting in you. Its pretty much a greed scam most of the time.

[5t3v3]

Originally posted by 1barA4


...or mad risk tolerance and luck.

One of my friends turned nothing into a million dollars (and his cheques from dividends alone is more than double my yearly salary now)...all he did was take a whole bunch of loans simultaneously so they didn't show up on his credit report when applying the next loan, open up a margin account and traded like a mofo.

Some research, good choices and a lot of luck, less than a year later, he's earned his million+ bucks. He could quit his job but why? He can trade while he works there and collects yet another income stream with minimal work.

Yes, I'm jelly.

Isn't it sort of irresponsible kinda investing? Massively over leveraged like what the banks did to trigger financial melt down but on a much smaller level.
He came out ahead so good for him, nonetheless.

[CapnCrunch]

To make money in the stock market, someone else has to lose it.

[sputnik]

Originally posted by CapnCrunch
To make money in the stock market, someone else has to lose it.

Uh. no.

Company X IPOs at $10/share.

You buy 1000 shares at $10 and sell them to me when they reach $20.

I buy those shares at $20 and sell them to someone else at $30.

Who lost money?

[5t3v3]

Originally posted by sputnik


Uh. no.

Company X IPOs at $10/share.

You buy 1000 shares at $10 and sell them to me when they reach $20.

I buy those shares at $20 and sell them to someone else at $30.

Who lost money?

Stocks don't always go up and up.
Companies can't grow forever.

[CUG]

The beautiful thing about this is that the opportunity is available to all of you :)

Quit bitching you fucking commie socialist marxists.

[Graham_A_M]

Originally posted by sputnik


Uh. no.

Company X IPOs at $10/share.

You buy 1000 shares at $10 and sell them to me when they reach $20.

I buy those shares at $20 and sell them to someone else at $30.

Who lost money?
Dude, wow :nut: seriously?

[ZenOps]

Some say that stocks are going "up" only because they are being valued against a rapidly deteriorating US dollar (and Euro)

But beating commodities in this inflated market? I don't think so.

Tangible goods over 80% on the year is usually the sign of a dollar collapse, of which most stocks rely on. Your friend may have made a million paper $ US (much like Zuckerberg is worth about $10 billion US on paper) but one must be very careful to not be overly decieved by numbers.

Many a multimillionaire rock star have gone from $10+ million to owing $10+ million before their careers were over.

As of today, as a global currency given the "official" monetizations, the one US dollar is worth about 77 cents. By *my* estimation, the US dollar is worth about 2.4 cents.

http://www.bloomberg.com/apps/quote?ticker=DXY:IND

[elesdee]

Originally posted by Graham_A_M

Dude, wow :nut: seriously?

He's right. When stock prices appreciate and you book capital gains nobody loses.

The futures/forwards/derivatives markets however are different. It's a zero sum game. So if one gains, the other loses the exact same amount.

[CapnCrunch]

Originally posted by sputnik


Uh. no.

Company X IPOs at $10/share.

You buy 1000 shares at $10 and sell them to me when they reach $20.

I buy those shares at $20 and sell them to someone else at $30.

Who lost money?

Lol dude just stop posting. Read a book, then come back and we'll talk.

[elesdee]

Originally posted by CapnCrunch


Lol dude just stop posting. Read a book, then come back and we'll talk.

Are you seriously saying that trading in the stock market is a zero sum game?

investopedia.com

[sputnik]

Originally posted by CapnCrunch


Lol dude just stop posting. Read a book, then come back and we'll talk.

Then explain this chart.

100 years of the Dow.

http://www.flexcharts.com/images/ChartGallery/Dow_100_small.png

[CapnCrunch]

Originally posted by sputnik


Then explain this chart.

100 years of the Dow.

http://www.flexcharts.com/images/ChartGallery/Dow_100_small.png

Wow, it looks almost exactly like the 100 year inflation chart.

[CapnCrunch]

Originally posted by elesdee


He's right. When stock prices appreciate and you book capital gains nobody loses.

The futures/forwards/derivatives markets however are different. It's a zero sum game. So if one gains, the other loses the exact same amount.

The company you buy the stock from is technically losing out on the stock gains.

[dawerks]

Originally posted by sputnik


Uh. no.

Company X IPOs at $10/share.

You buy 1000 shares at $10 and sell them to me when they reach $20.

I buy those shares at $20 and sell them to someone else at $30.

Who lost money?

:rofl:

[1barA4]

Originally posted by 5t3v3


Isn't it sort of irresponsible kinda investing? Massively over leveraged like what the banks did to trigger financial melt down but on a much smaller level.
He came out ahead so good for him, nonetheless.

He's got two kids and yes, we all thought it was terribly irresponsible...especially once your home and kids are at risk but it worked out for him.

Is it blind luck? Who knows, I just know he puts the research in and it's not all sunshine and lollipops cuz there's lunch hours where he laments how he lost 100k, or celebrates that he made 300k that morning.

I dunno, it's way too risky for me, I'd have (more) ulcers than I already do...

[sputnik]

Originally posted by CapnCrunch
The company you buy the stock from is technically losing out on the stock gains.

:facepalm:

The stock was sold to raise money for the company to invest back into the company to make more money (and thus increase the stock value).

How do you expect the company to make money money without selling the stock at a lower value (prior to the investment and subsequent profits) to begin with.

You obviously have no clue how the stock market works or what purpose it serves.

[CapnCrunch]

Originally posted by sputnik


:facepalm:

The stock was sold to raise money for the company to invest back into the company to make more money (and thus increase the stock value).

How do you expect the company to make money money without selling the stock at a lower value (prior to the investment and subsequent profits) to begin with.

You obviously have no clue how the stock market works or what purpose it serves.

I know why they issue stock. The company makes money by selling a product or service.

Selling stock isn't "making money", it's liquidation of a share in your company.

If you have a 200,000 home, and sell me half for 100,000, you didn't "make" 100,000 you retard. :rofl:

[sputnik]

Originally posted by CapnCrunch


I know why they issue stock. The company makes money by selling a product or service.

Selling stock isn't "making money", it's liquidation of a share in your company.

If you have a 200,000 home, and sell me half for 100,000, you didn't "make" 100,000 you retard. :rofl:

:facepalm: x 2

It is not liquidation.

What a company does is essentially this.

I own a factory that is worth $200,000 and sell you a 50% share for $200,000 (stock issues are never based directly on the value of the company but rather perceived potential) so that I can take that money and double production so the factory is worth at least $400,000.

However with the factory upgrade completed the company is worth $500,000 because demand for the product grew even more as a result.

Being the owner I am making more every quarter in profits than I was with my dinky little company and you are sitting on a share that is worth 25% more than you paid for it.

The additional profits I am making are now helping grow the company even larger or paying a dividend to shareholders.

[CapnCrunch]

Originally posted by sputnik


:facepalm: x 2

It is not liquidation.

What a company does is essentially this.

I own a factory that is worth $200,000 and sell you a 50% share for $200,000 (stock issues are never based directly on the value of the company but rather perceived potential) so that I can take that money and double production so the factory is worth at least $400,000.

However with the factory upgrade completed the company is worth $500,000 because demand for the product grew even more as a result.

Being the owner I am making more every quarter in profits than I was with my dinky little company and you are sitting on a share that is worth 25% more than you paid for it.

The additional profits I am making are now helping grow the company even larger or paying a dividend to shareholders.

Thats great and I'm sure glad you straightened that out for the people that might not understand.

Let me summarize this, if you own 100% of you companies stock, and sell me 50%, and then the stock doubles, you' have lost the profits on 50% of your stock.

It doesn't matter if you took the money from the stock sale and made 100 times more money some other way or whether you blew it and have nothing left, you have lost 50% of the money gains on your stock price because you sold me half.

I don't know why you're picking one specific scenario and trying to argue this?

Please don't pull some other random scenario out of you ass, just address what I said.

[sputnik]

50/50 is a bad example on my part because it assumes outside shareholders have a controlling interest in the company. That said it makes the math easier.

Assuming you personally don't have controlling interest the revenue that comes in as a result of the stock sale, subsequent investment and increased business can be used at the owners discretion.

It can be reinvested into the company to continue to grow the business or taken as profits, taxed and the remainder distributed as dividends to the shareholders.

Just because the company makes more than it budgeted doesn't mean that it has to be distributed to shareholders. This is why huge purchases are often made near year end when surpluses are projected.

Yes I have ultimately have access to less profits, however your investment allowed the company to double in size, have an increased revenue stream, larger market base and greater potential for future growth.

This is why companies go public. To grow their businesses using money from other peoples pockets.

[CapnCrunch]

Originally posted by sputnik
50/50 is a bad example on my part because it assumes outside shareholders have a controlling interest in the company. That said it makes the math easier.

Assuming you personally don't have controlling interest the revenue that comes in as a result of the stock sale, subsequent investment and increased business can be used at the owners discretion.

It can be reinvested into the company to continue to grow the business or taken as profits, taxed and the remainder distributed as dividends to the shareholders.

Just because the company makes more than it budgeted doesn't mean that it has to be distributed to shareholders. This is why huge purchases are often made near year end when surpluses are projected.

Yes I have ultimately have access to less profits, however your investment allowed the company to double in size, have an increased revenue stream, larger market base and greater potential for future growth.

This is why companies go public. To grow their businesses using money from other peoples pockets.

I'm just going to assume that by avoiding what I asked you, we're no longer talking about the same thing.

Lets try this on then.

You sell me 49% of your company for $100,000 and completely squander the money. You spend it on hookers and blow lets say. Your company revenues stay the same, etc.

A year later, some unrelated, unforseen event (like a tsunami) causes the share price of your company to go up 100%.

So now, my money did nothing for you, and you also lost out on 49% of that stock increase.

Please don't just respond by posting another scenario where your company wins in this. It's not my point.

My point is, by buying your stock, I'm buying your risk. What you do with that money is completely irrelevant.

If the stock goes down 50%, you win by being able to buy my stock back for half of what it sold for, and I lose based on the decrease in share value.

If the stock goes up 50%, I win by having a stock worth 1.5 times more than I paid for it, while you lost by having 49% less of this higher priced stock.

[you&me]

Originally posted by CapnCrunch


I'm just going to assume that by avoiding what I asked you, we're no longer talking about the same thing.

Lets try this on then.

You sell me 49% of your company for $100,000 and completely squander the money. You spend it on hookers and blow lets say. Your company revenues stay the same, etc.

A year later, some unrelated, unforseen event (like a tsunami) causes the share price of your company to go up 100%.

So now, my money did nothing for you, and you also lost out on 49% of that stock increase.

Please don't just respond by posting another scenario where your company wins in this. It's not my point.

My point is, by buying your stock, I'm buying your risk. What you do with that money is completely irrelevant.

If the stock goes down 50%, you win by being able to buy my stock back for half of what it sold for, and I lose based on the decrease in share value.

If the stock goes up 50%, I win by having a stock worth 1.5 times more than I paid for it, while you lost by having 49% less of this higher priced stock.

You're completely ignoring so many major components of company valuation and why stocks are priced as they are, I'm not sure it's worth even trying to explain...

a) no one, companies or investors win or lose on stock until they sell.

b) companies buy back their stock at depressed prices all the time.

c) if "your" stock goes up 100%, so do the remaining (in your example 51%) shares that the company owns itself. It isn't profit for anyone (you, or the company) until the stock is sold.

d) if the stock goes up 100%, there's a reason, likely that the company is making a lot money. So, "your" stock goes up and the company's stock goes up, but the company also keeps all the money from profits that caused "your" stock to go up in the first place. You win, but the company wins twice.

e) if the company squandered all of the money that "you" invest in them, the chances of their stock maintaining it's value are nil because other investors will bail. You'd basically lose as much as the company does in equity, but they had the added pleasure of blowing the investment on hookers and blow. Stock investing isn't just about the numbers. Ever watch what happens to Apple stock after Steve Jobs sneezes?

That's all I can manage for now, but really, stop face-palming posters when you're so obviously clueless about the subject being discussed.

There was nothing wrong with Sputnik's original example with the stock going from an IPO at $10 to stock at $20 and then to $30. It was maybe too simple, but he was right in that no one lost money... the only thing lost was potential gains.

[sputnik]

Originally posted by you&me
There was nothing wrong with Sputnik's original example with the stock going from an IPO at $10 to stock at $20 and then to $30. It was maybe too simple, but he was right in that no one lost money... the only thing lost was potential gains.

Thanks!

Even in my over simplified example there was no way for the company to sell at $30/share when the IPO was valued at $10/share.

Also in order to get to a $30/share value they needed the money from the $10/share sale to grow their business.

CapnCrunch is clueless.

[5t3v3]

sputnik and CapnCrunch.
I think you two are on different pages.

sputnik, in the scenarios you keep talking about, everyone is making money only because the company is growing.
What about when the company's stock decline for whatever reason? Sure, the stock share holder only loses money when he sells it (less than the amount he bought them for) but in the big picture, the trade is a zero sum game.

If you take the company's entire life span, from its birth to bankruptcy. For whatever amount of gain people were able to walk away with from stock trade, some other people lost about that amount is lost during its life span towards its demise.

edit: Using your example.
Company X IPOs at $10/share.

You buy 1000 shares at $10 and sell them to me when they reach $20.

I buy those shares at $20 and sell them to someone else at $30.

The company tanks 'cus it's a scam.

I made $10 when I sold you the shares.
you made $10 when you sold to some guy.
$10 is the original IPO, the scam artists walked away with.
total = $30
that last guy who bought the share for $30 lost money.

[you&me]

Originally posted by 5t3v3
sputnik and CapnCrunch.
I think you two are on different pages.

sputnik, in the scenarios you keep talking about, everyone is making money only because the company is growing.
What about when the company's stock decline for whatever reason? Sure, the stock share holder only loses money when he sells it (less than the amount he bought them for) but in the big picture, the trade is a zero sum game.

If you take the company's entire life span, from its birth to bankruptcy. For whatever amount of gain people were able to walk away with from stock trade, some other people lost about that amount is lost during its life span towards its demise.

edit: Using your example.
Company X IPOs at $10/share.

You buy 1000 shares at $10 and sell them to me when they reach $20.

I buy those shares at $20 and sell them to someone else at $30.

The company tanks 'cus it's a scam.

I made $10 when I sold you the shares.
you made $10 when you sold to some guy.
$10 is the original IPO
total = $30
that last guy who bought the share for $30 lost money.

But that's assuming the company goes banko.

It's not a zero-sum game.

[5t3v3]

Originally posted by you&me


But that's assuming the company goes banko.

It's not a zero-sum game.

Everything comes to an end eventually. Given enough time, the company will fail sooner or later.
Sure, when the "too big to fail" shit happens and the government intervene, then that's entirely something else. Even then, that's the taxpayer's money that's taking the blow.

Stocks go up and down. People lose money while some made money. How is it not a zero sum game, unless you want to come nit pick and talk about broker fee expenses or something. Even when taking dividends into account, the stock prices go down after dividends are paid out.

[4DoorGTZ]

http://i10.photobucket.com/albums/a138/suicidal_murder/derailed-train-derailed-thread-demo.jpg

[you&me]

Originally posted by 5t3v3


Stocks go up and down. People lose money while some made money. How is it not a zero sum game, unless you want to come nit pick and talk about broker fee expenses or something. Even when taking dividends into account, the stock prices go down after dividends are paid out.

Stocks (and the stock market, and the economy in general) are not a zero-sum game. There is constantly new money being introduced.

4door is right, this is way off topic...