/biz/ - Business & Finance

[Anonymous No.17713593]

I have no ideia how all this stock shit work, but I have two questions: Everyone is freaking out about losing money, but, money isn't getting burned on the streets. If people are losing money, aren't other people getting the lost money? Where do the lost money go?

[Anonymous No.17713664]

>>17713593
I cant believe you managed to make a thread. Good job anon

[Anonymous No.17713710]

jesus christ...

[Anonymous No.17713747]

>>17713593
I have a rock.
You want a rock. So does your neighbor, Crud.
I say I'll sell one of you my rock.
You offer $1. Crud offers $1.01. I sell my rock to Crud, and a rock is now worth $1.01.

A week goes by and the rock doesn't really do much. Crud wants to sell his rock. I am willing to buy the rock back, but for $.99. You offer $1 again. Crud sells his rock to you. The rock is now worth $1 and has lost $.01. I have $1.01. You have a rock. The same amount of money exists, the same rock exists, it just all changed hands.

So in short, yes, one person's "lost" money is another person's gained money OR gained rocks.

Now Crud has $1

[Anonymous No.17713775]

>>17713747
idk how my post got jumbled but you get the idea (or not)

[Anonymous No.17713833]

>>17713593
Yes the money is flowing elsewhere, wherever it feels more confident. But do you want money flowing away from all the businesses that you rely on every day?

[Anonymous No.17713844]

>>17713747
You are dumber than OP

[Anonymous No.17713845]

>>17713593

[Anonymous No.17713871]

>>17713747
Don't forget to pay your cap gains on that sweet rock play, bro.

[Anonymous No.17713890]

>>17713844
>I can't follow so I'll just call you dumb
Wasted dubs.

[Anonymous No.17713909]

Anos, have patience, okay. I translate books and texts for a living, and none of them are good books or texts. I simply do not have the time to begin to understand all this, translator make no money at all. All I ever did was watch The Big Short.

[Anonymous No.17713918]

>>17713871
Bahahahahaha

[Anonymous No.17714038]

>>17713747
Why would people sell things they bought, for a smaller price? What if the rock becames valuable again? Also, do the prices go down because nobody wants rocks, but everyone wants to sell rocks?

[Anonymous No.17714079]

>>17714038
Then if that happens and you own rocks you're fucked so you have two options sell the rock for a realized loss and move on or hold the rock until rocks come back into favor and you can sell it for a profit again

[Anonymous No.17714138]

The thing you have to understand, anon, is that it is not money that makes the market. What is happening right now is stocks (and the money people have currently) [Their capital, let's say] Is loosing its perceived value.

That is the real kicker here. People are loosing faith in the system.

[Anonymous No.17714183]

>>17714138
Yup money is just worthless paper or metal coins it's the faith we place in them that has value and if people start losing their faith in it we get really fucky really fast

[Anonymous No.17714225]

>>17713593
I will never listen to financial advice on here ever again.

[Anonymous No.17714229]

>>17713593
Glad you asked anon.
As the old adage goes “there’s a nigger in the woodpile” except in the market it’s “there’s a Jew in the woodpile”.
We’re just about to discover who it is this time.
Stay tuned.

[Anonymous No.17714260]

Actually why doesn't someone try to explain it?
OP makes a good point.

[Anonymous No.17714293]

>>17713747
Can we stop and talk about that absolutely beautiful ID get?

[Anonymous No.17714328]

What’s in his portfolio bros

[Anonymous No.17714330]

The money was "lost" the scond you bought the stock. Now the person who sold it got your money.

You are left with the stock which has a value that goes up or down. It goes down right now so you're losing ""money""

[Anonymous No.17714335]

>>17713593
Companies were overleveraged. This'll cause a lot of bankruptcies, fucking peoples retirement plans, or the government will bail them out causing high inflation, fucking everyones savings.

[Anonymous No.17714339]

>>17714328
Long sardines

[Anonymous No.17714362]

>>17714328
>>17714339
*anchovies

I'madumbfag...

[Anonymous No.17714375]

>>17714138
Why would people play around with perceived value into things only to freak out later. If people try to sell things for more that it's really worth, why are they surprised when people will eventually find out. If you get too greedy, you will end up trying to sell a tree to a forest.

[Anonymous No.17714419]

>>17714330
Oh, makes sense. And why is it going down?

[Anonymous No.17714478]

>>17714419
Because people are afraid it will go down

[Anonymous No.17714494]

>>17713593
Stocks are not cash. They are legal titles that represent ownership over a company, and that can be traded in the market, hence why they're measured in monetary units. Having a stock is having a part of a company, which implies that you have the right to perceive a part (proportional to the stocks you own) of the benefits that the company generates. This benefits are called dividends. So, the true value of stocks is actually the possibility of receiving dividends.
What happens when there's a recession? Companies diminish production and hence profits. That means: less dividends. So the stocks are worth much less, and this can be seen in their new monetary value which is much lower. When there's a recession, the economy produces less. Therefore companies are worth much less, and stocks go down.
More or less that's what happening (it's infinitely more complex but this Is the base)

[Anonymous No.17714523]

>>17714478
And what they do when they are afraid? They sell? Because they don`t want to lose? Then they really everyone is selling so the value keeps going down? That is some fucked up shit. How all this speculation is not illegal. You should come up with a way to prevent people from becoming rich or poor overnight.

[Anonymous No.17714539]

>>17714523
Then they realize*

[Anonymous No.17714627]

>>17714494
Oh fuck. This sounds so complex but actually looks so stupid and greedy. I bet many people do all kind of dirty shit to make money without work. So this is why the "buy low, sell high" thing exist. People put their money in the hands of other people and all they have in return is the hope that the piece of paper they hold will have more value based on someone else's ability to do their job right?

[Anonymous No.17714849]

>>17714293

Yes! Disappointed Mr Anus and his retard post aren't getting more attention.

[Anonymous No.17714871]

STOCK MARKET IS A ZERO SUM GAME

[Anonymous No.17714884]

>>17713593
I could explain but you don't have the attention span to understand

[Anonymous No.17714895]

>>17714375
You mistakenly believe that anyone is rational

[Anonymous No.17714919]

Why doesnt everyone just buy SQQQ?

[Anonymous No.17714954]

>>17714884
I am still here, reading all posts. I'm starting to understand better now.

[Anonymous No.17714982]

>>17714335
>>17714335
It should be forbiden to invest other people's money and for the goverment to put so much money to help those who do it.

[Anonymous No.17715005]

>>17713593
If my car goes down in value WHERE DID THE MONEY GO?

[Anonymous No.17715043]

>>17714627
All investing is a kind of bet on the future value of something. Some assets like gold don’t produce anything, they simply exist, and due to the universal trust people have in it as a true money, there’s demand for it. Some assets produce value. Real estate can produce value by renters who want to use or live in the space. It also can appreciate from growing demand for land in the area. Stocks are value producing assets that use human productivity as well as tangible assets to create value through commerce.

Owning any of this isn’t dirty, it’s just a matter of creating a thesis of what is the thing to own that will hold and increase its value over time. Nothing is certain except that the dollar you cling onto for fear of making the wrong decision will one day become worthless. That is the only certainty and that’s why you really don’t have a choice but to invest somehow

[Anonymous No.17715056]

>>17714954
kys

[Anonymous No.17715134]

>>17714419
The thing you have to realize is a bunch of (((banks))) got together and said, "let's play pretend."

Say I am a Bank with $5000 in various accounts. I go to Tom and say, "here is $50 for $5000 worth of stocks. Obviously this $50 is just a teeny tiny down payment of $5000. You know I'm good for the rest of it, I am a Bank. Whoever heard of a bank without money?" Tom says sure and now I have 5k in stocks for $50 and also still have $4950 that is technically still in my possession.

So then I go to Sally and say, "here is $50 for $5,000 worth of stocks. You know I am good for it. I am a Bank." ...you can see where this is going.

Rinse and repeat MILLIONS OF TIMES by every single bank. There is a whole lot of "money" out there that is not backed by anything. If people ever try to withdraw all of their savings out of a bank, the bank fails. This is called a "run" on a bank. While all this "pretend" money is out there, the stock market is a joke.

However, if you can close your eyes and also play pretend, you can make a shit ton of money and flee before everyone else realizes it is a hoax.

[Anonymous No.17715182]

>>17715134
Lmao, here comes the shit for brains nazi trying to defending his horrific economic system falling apart right in front of his god damn eyes.

[Anonymous No.17715213]

>>17715182
>Nazi's economic system is capitalism.
Yes, I took your bait.

[Anonymous No.17715305]

HOW HAS NOBODY ELSE MENTIONED THE PECULIARITY OF ALL THESE “I’m stupid educate me” type threads that always follow a Socratic line of questioning that leads towards socialist ideas. I’m convinced these are paid shills. I don’t know what country is trying to seed socialism as a solution here on /biz but it’s definitely happening right now. It’s not just leftypol this time. Something is real fishy.

[Anonymous No.17715498]

>>17715134
I believe some powerful people are spending lots of money to keep this legal. Amazes me how even the most critical of the anti-capitalists are dumb enough to not use this shit to promote their socialist bullshit. It must be because the actual people behind all of this are neither capitalists nor communists, or, should I say, they are both and none at the some time. They have so much power and control, it is impossible to see how they manipulate everything for their own benefit.

[Anonymous No.17715628]

>>17715182
Where on earth did I defend it? Goddamn you idiots fail reading comprehension so damn hard.

[Anonymous No.17715727]

>>17713593
You’re assumption is correct but people aren’t losing actual realized gains, they’re losing their perceived gains on paper. It’s not realized until you sell.

So all these retail normies who buy stocks or have a 401k are freaking out because the value has been declining since other people are selling their stocks.

And it’s a very steep decline so they are pissed. We’ve been in a massive bull run since 09ish and everyone was under the assumption stonks only go up, but looks like that’s not the case. But over a 30 year time or whatever, there are going to be downtrends in market cycles. That’s just how it goes.

The REAL kicker is will this all crash to
Oblivion. Answer is no. Merica will keep printing money and if anyone has a problem with that we will fuck their bitch asses up.

[Anonymous No.17715746]

>>17713593
>but, money isn't getting burned on the streets.
Is burned digitally
>If people are losing money, aren't other people getting the lost money? Where do the lost money go?
No one gets the money, the prices of the stock market do not correlate to reality, days that is exactly the point of a stock market, to not be bound by the walls of reality, it's a pocket dimension created by humans where otherworldly financial phenomenon happens

[Anonymous No.17715758]

>>17715305
Good eye, bro.

Confirmed commie psy-op.

[Anonymous No.17715764]

>>17713593
how does mone work frens?
i mean its just paper

[Anonymous No.17715923]

>>17714627

Initially the company sells the stocks in order to get money to do something, like invest in tech or expand operations overseas. Other people having stock in a company also makes them want the company to succeed.

[Anonymous No.17716924]

>>17713593
OP, you think of money as too much of a 'real' thing.
Money is only used to measure how much things are worth. A means to an end. A unit of measurement. Nothing more.
So now, the numbers are changing in significant ways. In the 90's, life was quite good, and up until recently, we still managed to convince ourselves, that life was quite good and that it would continue to be good. So the things that are valuable in that kind of world, like stocks and retirement funds, were indeed valuable, because they promised to pay for your future in which you would party on a yacht and send your kids to college.
However, it looks a lot like we are entering a different kind of world, where life is not so wonderful. New diseases, lots of people who don't pull their weight in terms of productivity, plus we're running out of oil, which is the lifeblood of our comfortable lifestyle. And if we're forced to suffer such a big setback as a human race, the relative value of stuff will change dramatically. Those retirement assets I mentioned earlier? Nobody needs that stuff.
For example, a mild case doomsday: We enter into a deflation, similar to the Great Depression. Asset prices drop, and the value of cash shoots up. No one wants to invest any of their hard-earned money, and so, nothing important (like making medicine, for example) gets done.
Severe case doomsday: the value of cash drops alongside other asset classes, and we go into hyper inflation, similar to post-war Germany. Cash becomes worthless as people have no confidence in any facet of society. Only thing that's valuable now is food, medical supplies, weapons, and maybe various trinkets for bartering, like gasoline, gold, maybe random stuff like cigarettes, and the world goes into a mad max kind of dark age

[Anonymous No.17717173]

>>17715134
Hey Anon, I agree that fractional reserve banking is trouble waiting to happen. However, realize also that those 5k worth of stock you mentioned are in fact backed by something, and that is the fairly good chance that that company will put all of those $5000 back into the investor's pocket at some point in time.
A typical price earnings ratio today is like 20, so assuming a 100% payout ratio, investors are saying, "OK, in 20 years I'll have all my money back, plus I still own this awesome company" and so they're in a good spot, but the way the world is starting to look, it appears that you can't sit around for 20 years and wait to break even, because we could be in for a really bumpy ride along the way, and this gloomy realization is what makes markets crash.
To add to your point, a simultaneous bank run would exacerbate the problem

[Anonymous No.17717270]

>>17713593
it's the imaginary value they lose. sometimes even that which never existed in the first place and has always been fake
also
ALL WOMEN ARE WEAK MINDED WHORES

[Anonymous No.17717963]

>>17713747
your example was almost good but im pretty sure i lost an iQ point reading that mr anus sex

[Anonymous No.17718012]

>>17714375
in short, people have bills to pay.
theres also the psychological part, even if you're fine, you see your portfolio 'losing' thousands of dollars a day and you freak out & go "ill just sell now and lock in my profits over the last 10 years instead of seeing it tank".

[Anonymous No.17718115]

>>17717173
> those 5k worth of stock you mentioned are in fact backed by something
this, theyre worth $5k because they pay you a dividend for holding them. how much theyre worth is up to each investor to evaluate for themselves, based on their appetite for risk & reward and available timeframe to hold for.

The long term of companies are expected to rise, and on average, they do, but companies do fail, or make less profit than expected. this is part of the risk of holding stock, and a reason it could go down in value.

[Anonymous No.17718735]

>>17714494
This brings me to a question I've been wondering a lot lately: what's the inherent value of a non-dividend stock? Nothing, right? It's basically a ponzi scheme where you pass around "ownership" that, in the grand scheme of things, doesn't have any tangible meaning.

[Anonymous No.17719037]

>>17718735

whether a company pays a dividend or re-invests 100% of its profits into growing the company, or just hoards cash, you're still entitled to a share of that.
Amazon is an example of a company that doesnt pay a dividend. Investors are ok with it because theyre basically saying "jeff bezos can use this money better than i can, if i let him keep it he'll re invest it and grow it faster than i could if i had it." and so far, theyre not wrong.

[Anonymous No.17719118]

>>17718735
>>17719037
a simplistic way of thinking of it is if the business build machines that literally print money.
You can ask the guy to pay you a share of that money being printed, or you could let him keep it & hire more people to build more printers so it prints more money. so on, you never ask for a dividend because you want them to build as many printers as possible. the business is clearly worth more, because of the cashflow coming in & in theory the shareholders could ask for a dividend but why would you take cash from the company when they could build more printers.