I'm just moving this as a fond memory of the good ole days on the RB VWKM thread....since, imvho, the VWKM ticker will be long gone soon.
By: argubot3
30 Dec 2005, 08:15 AM EST
Msg. 1321 of 5014
(This msg. is a reply to 1318 by creedebighorns.)
Jump to msg. #
I'm not sure I appreciate being told I am perpetuating a lie, especially since the logic on this is crystal clear.
If you make money on a stock, where did that money come from?
Someone lost it! You found it! It wasn't printed for your benefit.
Now, I can make an argument in your favor and say that the value of the company backing the stocks has increased so while you hold them the increase you make comes to you through the merits of the company and not from new shareholders.
But then I would ask, what happens to the shareholders of a competitor's stock, when your company outperforms the competitor, and the competitor's stock value drops. The money always comes from someone else's pocket. For you to win, someone must lose.
I could make dozens of points in your favor, but they are all defeated by expanding your view to find the source of the money gained.
Jumping topics now, back to the stupid woman who through her own bad decisions put herself into a situation where a crime was committed against her, I would say that what happens in the pink sheets is equivalent to the justice system allowing the crime to go unpunished because the woman should have known better.
But how do you distinguish between a woman in a sleazy dress deliberately strolling through a bad area and a woman in a sleazy dress who while driving becomes lost, ends up in the bad area and has car problems. Same dress, same area, is she to blame for anything?
There is no crime in walking through a bad area with something that someone else wants. It is a crime for it to be stolen.
Is it ok to shift the blame from the criminal to the victim because the victim is stupid?
- - - - -
View Replies »
By: creedebighorns
31 Dec 2005, 12:19 AM EST
Msg. 1348 of 5014
(This msg. is a reply to 1321 by argubot3.)
Jump to msg. #
Alright, let's try to discuss this "loser" topic in the simplest terms. Let's say that some guy with a boat said that Elvis's lost gold suit is in the Mississippi River near Memphis, but he really needed some money to get the search in motion. So he tells me that I can have 1 share of Elvis Exploration Associates International, Inc(ticker EXVP). for $10,000. Since I love Elvis's gold suit, I say "yes" and get my 1 fat share. Now, lets say that after buying a bunch of equipment, maps, pizza, and stuff the CEO of EXVP and crew makes a few trips across the river. On the voyage several "blips" have been seen on the radar and the CEO rushes to shore and calls the Commercial Appeal and puts out a news story that says that EXVP has PERHAPS found Elvis's lost gold costume at the bottom of the Mississippi river. That news prompts a Japanesse Businessman (who happened to be in town) to come to me and beg to buy my one share. I refuse because I love Elvis so very much...after all, this IS MY TOWN. He then offers me $20,000 for my one share....still I will not part with it...he goes for broke and offers $40,000 for my share. After a brief time I decide he loves Elvis more than me and I take the money(besides, he thinks, they haven't really found the suit yet). So, what has happened is that I "made" money because the demand for the 1 share went up, but the supply stayed same(God bless EXVP).
Ok. A trade has now occurred and I don't see where anyone has lost any money. The business now has the Potential to lose. He also has the opportunity of infinite returns, since the most he can possibly lose is $40,000k(plus commissions), but he could gain an infinite amount. All that has happened is the business man has taken my place as the optimist that EXVP is going to find that suit.
So, keeping it simple, let's look at three possibilities.
The first, EXVP puts on their scuba suit, goes to the bottom of the river, fights a big catfish, brings home a gold suit. Another Elvis lover, a southern belle who was at an Elvis concert in which she touched the suit, offers the business man 160,000k for the 1 share of stock. Business man really wants to bring home a piece of Graceland, but would rather bring home a 4 bagger instead(hey, they haven't confirmed the suit is real...yet).
The second, EXVP discovers the "blips" on the bottom are nothing but a a couple of old Chevy's. The CEO then releases a couple of PR's saying that he is 100% sure that the suit is somewhere either north or south of the point he just searched...and vows to never stop until he searched the entire river bed from end to end(including a little of the Gulf of Mexico). He then sells 3 more shares because he need money to continue. The dilution increases the supply and thus the value begins to drop. The CEO looks for the suit for 40 more years(value is also dropping due to less demand because of doubt), and dies broken hearted(along with the share holders because now their shares are worth .0001). Or you could have any alternate ending of your choice with this one because perhaps the suit is found somewhere along the timeline.
The insidious third, CEO takes money from the beginning to Tunica for "fun" and spends it all. Issues PR after PR, dumps share after share, until the stock hits the cellar. Stock gets halted. CEO goes to jail. Businessman reads in paper that the CFO of the company turns out to be Danny Owens( treas.gov ).
Who loses money in scenario 1? Scenario 2 is a toss up depending upon if the suit is found or not and when. Scenario 3 would be a loss.
However, in scenario 3 the businessman could have saved himself quite a bit of grief if he would have done his DD.
GB+ND
c
|
