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  1. #61
    Quote Originally Posted by Gamdwelf View Post
    Since I almost have a master's degree in economics I'm not LARPing as an Economist. I am one.
    It's like being doctor fresh out of college, sure you may have the title but no one in their right mind trusts you until you've done it for awhile.

  2. #62
    Fluffy Kitten Yvaelle's Avatar
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    Quote Originally Posted by Nymrohd View Post
    Who the fuck cares about economics majors, you want someone who studied finance here, not economics
    Finance is really more like glorified accounting

    Finance is relevant here in how the markets shift on a day-to-day basis, and the short-term effects this has on perhaps a single company or industry.
    Economics is how this turns out, on the macro-scale (nationally, or globally), and in the long-run (years, even decades).

    The short version is that a Finance major would tell you that this sort of rapid drop and slight rebound might occur.
    Economists would tell you it's still ultimately a bad move, in the long term, for the UK economy.
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  3. #63
    The Unstoppable Force THE Bigzoman's Avatar
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    Quote Originally Posted by Gamdwelf View Post
    Most people don't.
    Sadly, this is true.

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    Quote Originally Posted by Yvaelle View Post
    Finance is really more like glorified accounting

    Finance is relevant here in how the markets shift on a day-to-day basis, and the short-term effects this has on perhaps a single company or industry.
    Economics is how this turns out, on the macro-scale (nationally, or globally), and in the long-run (years, even decades).

    The short version is that a Finance major would tell you that this sort of rapid drop and slight rebound might occur.
    Economists would tell you it's still ultimately a bad move, in the long term, for the UK economy.
    No.

    That's Exactly what it is.

    It's not even that fucking hard to pick up, really.

    6 months on a job and independent study and you can handle quite a bit.

  4. #64
    Quote Originally Posted by Theodarzna View Post
    I put on my wizard hat and cast magic missile!
    Do you have any Cheetos???


    I still don't trust any even those that say they are experts in economics. Conspiracy theory says there are shoe strings being pulled behind the scenes.

  5. #65
    Quote Originally Posted by hydrium View Post
    It's like being doctor fresh out of college, sure you may have the title but no one in their right mind trusts you until you've done it for awhile.
    I've been trading in the stock market for years and was basically trained to do it by my grandpa, who has been doing it for the last 50 years.

    I'm not just bullshitting
    Gamdwelf the Mage

    Quote Originally Posted by Theodarzna View Post
    I'm calling it, Republicans will hold congress in 2018 and Trump will win again in 2020.

  6. #66
    Quote Originally Posted by Aurinaux View Post
    Did you know that even with the stock market you can make a profit while contributing no economic benefit to a company, so even if I had chosen to not make that distinction, I could still make that assertion?
    Not really true. You are essentially paying a higher value for the original offering, which pushes the value at which the company is worth (and could be sold for). The fact you bought it off someone not from the company means nothing, as you are essentially holding on to that IPO for the company, just at a higher price, and taking it off someone else's hands.

  7. #67
    The Unstoppable Force Theodarzna's Avatar
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    Quote Originally Posted by Logwyn View Post
    Do you have any Cheetos???


    I still don't trust any even those that say they are experts in economics. Conspiracy theory says there are shoe strings being pulled behind the scenes.
    Economists are like Historians but without the humility or fun stories filled with gore, sex, and tragedy.
    Quote Originally Posted by Crissi View Post
    i think I have my posse filled out now. Mars is Theo, Jupiter is Vanyali, Linadra is Venus, and Heather is Mercury. Dragon can be Pluto.
    On MMO-C we learn that Anti-Fascism is locking arms with corporations, the State Department and agreeing with the CIA, But opposing the CIA and corporate America, and thinking Jews have a right to buy land and can expect tenants to pay rent THAT is ultra-Fash Nazism. Bellingcat is an MI6/CIA cut out. Clyburn Truther.

  8. #68
    Quote Originally Posted by Theodarzna View Post
    Economists are like Historians but without the humility or fun stories filled with gore, sex, and tragedy.
    Yeah kinda.
    Gamdwelf the Mage

    Quote Originally Posted by Theodarzna View Post
    I'm calling it, Republicans will hold congress in 2018 and Trump will win again in 2020.

  9. #69
    Quote Originally Posted by Lord Berserker View Post
    I've always wanted to do so myself, but I heard it requires very shrewd investment knowledge and to me it comes off like gambling really.

    All I know is buy low sell high.
    If you're too worried to take directed market actions, buy indices. Or, since a lack of knowledge seems to paralyze you, you could take advantage of the largest stockpile of investment knowledge ever conglomerated by man, and...I dunno. Type some stuff into a search engine, and see where that takes you.

  10. #70
    Quote Originally Posted by Aurinaux View Post
    Did you know that even with the stock market you can make a profit while contributing no economic benefit to a company, so even if I had chosen to not make that distinction, I could still make that assertion?
    Absolutely false. You are providing liquidity for the primary investors, allowing the company issuing the stock to sell shares at a higher price. If the IPO was the only time shares changed hands unless the company bought them back then stock would be a worthless means of raising capital.
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  11. #71
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    Quote Originally Posted by dholland662 View Post
    For More on How Quickly the Britbong Stocks Rebounded see Andrew Neil's twitter (@afneil).
    Financial markets only tell you what financiers think is going to be the economic impact. For the impact of Brexit on the real economy, we will have to wait until Brexit actually happens and that will take 2 years at least, perhaps 7+ years to negotiate new trade deals.

    But I'm not sure I would rely much on Andrew Neil's economics - he's an opinionated journalist and pretty firmly anti-EU. There's an argument for looking at the FTSE 250, rather than 100, partly because the 100 includes some multinationals that depend heavily on foreign markets, rather than the UK, including some gold mining ones (and gold does well in uncertainty).

    http://www.telegraph.co.uk/business/...e-ftse-100-to/

    Google search tells me that the FTSE 250 is down 16% following Brexit. I only have a PhD in economics, but to my untutored eye that sounds rather a big deal.

    What I am more interested though is the $2 trillion dollars reported to be lost on Friday on world stock markets. That sounds rather spectacular but I hope it was just volatility.

  12. #72
    Quote Originally Posted by Aurinaux View Post
    Short selling is a form of stock market participation. Short selling a company's stock hurts that company's stock.

    I do understand the indirect benefit of a nonissuer transaction.

    @Raybourne
    It's a side effect of the liquidity, bad with the good and all that.
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  13. #73
    Void Lord Felya's Avatar
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    Quote Originally Posted by Xarim View Post
    Well done ignoring the GBPUSD FX impact
    Doesn't that show a 10% loss in pound's value vs the dollar?
    Folly and fakery have always been with us... but it has never before been as dangerous as it is now, never in history have we been able to afford it less. - Isaac Asimov
    Every damn thing you do in this life, you pay for. - Edith Piaf
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  14. #74
    Quote Originally Posted by Aurinaux View Post
    Short selling does increase liquidity, but it also pressures stock prices downward. When that company goes to an underwriter to issue new shares, the underwriter is going to see the stock's price trending downward and renegotiate, moreso than increased liquidity--especially when that increased liquidity could be a body of people helping the company sink.

    Hopefully the increased liquidity is countered by investors "finding" them. But that's the most good that comes from short selling, and even then a savvy investor can analyze that liquidity and call it shit.
    You're talking about issuing more shares after short selling has already occurred, but I'm telling you that stock offerings, including the IPO, would not be a worthwhile avenue for raising capital without the secondary market and short selling is a side effect of the secondary market. The only way to eliminate short selling is to eliminate the ability to trade securities on credit which is unlikely to ever happen.
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  15. #75
    Quote Originally Posted by Aurinaux View Post
    Expand on this. You stated "allowing the company issuing the stock to sell shares at a higher price" to which I responded. Are you trying to withdraw that statement?

    Are my assertions incorrect? Does short selling harm a company's stock? Can you make a profit by short selling? The fact that short selling is an unfortunate consequence of the secondary market does not change the answers to these questions.

    Also, follow this conversation to it's source. The nut being cracked are investors making profit by contributing nothing to society.
    You're not understanding.

    Imagine there's no secondary market for stocks. When a share is bought during an offering, it remains with the original owner unless it is repurchased by the issuing company. If the original purchaser can't sell the shares in a secondary market, they aren't going to pay as much for the share in the first place, meaning the issuer will raise much less capital during their offering. So the secondary market makes issuing stock far more attractive as an avenue for raising capital.

    The side effect of that secondary market is that short selling is a possibility. Short selling does hurt a company's stock price in the small picture. In the big picture, however, the secondary market that enables that short selling is the only reason that the company was able to raise capital to begin with.

    Therefore, what I'm saying is that it's easy to say that short selling is bad because it damages stock prices but that ignores the fact that short selling is a necessary part of the overall secondary market.
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  16. #76
    Quote Originally Posted by Aurinaux View Post
    I understand all of that...

    So it is possible to participate in the stock market and create no economic benefit for the issuing company? To use your words, my claim is not "absolutely false"?

    What you're bringing up is a tangential to the discussion. No one said "man that darned secondary market should just be done away with". I don't know why you're trying to justify that narrow point to me.

    I would address the rest of your post but I'm afraid of letting the conversation run away more than it already has.
    The existence of short selling still contributes to the overall liquidity that buoys offering prices, so no, your claim is still wrong.
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  17. #77
    Quote Originally Posted by Aurinaux View Post
    Short selling does increase liquidity, but it also pressures stock prices downward. When that company goes to an underwriter to issue new shares, the underwriter is going to see the stock's price trending downward and renegotiate, moreso than increased liquidity--especially when that increased liquidity could be a body of people helping the company sink.

    Hopefully the increased liquidity is countered by investors "finding" them. But that's the most good that comes from short selling, and even then a savvy investor can analyze that liquidity and call it shit.
    Good job copy/pasting your previous irrelevant post, but I already addressed that. Underwriters aren't going to look at short selling of a company's stock during the IPO because there hasn't been any stock to short. You're still not getting the point I'm making.
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  18. #78
    Fluffy Kitten Yvaelle's Avatar
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    Quote Originally Posted by Aurinaux View Post
    I'm sorry man. Maybe it is me, but I'm just not seeing the coherence of your statements.
    It's not just you, I don't get it either.

    The best I can come up with is the "Bad with the good line" - which is the same sort of paralytic equality of opinion that makes CNN such a shitty news station: "here are two opposing views, we won't do any investigation into their relative effects, we'll present them as being equally valid, you decide which you want to believe!"

    Things which are both bad and good, are not equally bad AND good: on the sum, they are usually one or the other - almost never a perfect balance.

    A slight increase in liquidity resulting from short selling does not compensate for the significant bad effects it can have on trading. I'm not committing to saying we should get rid of short-selling entirely - but if the only positive for it is that it can benefit liquidity - that's a weak argument.

    In macroeconomics, liquidity in itself is not beneficial, except where it enables markets/currencies to a) react, or b) return to equilibrium / proportional parity, faster. Too much liquidity can be a very bad thing - all instances of hyperinflation in history have begun with too much currency liquidity: which leads to seismic capital shifts that throw the entire economy out of whack.

    I'm not a finance dude - but surely there must be some equivalent to stocks/markets - where too much liquidity creates instability rather than corrects it?

    For the uninitiated, think of liquidity like soil and earthquakes.

    You have a farm, there is no water table (no liquidity) beneath you. An earthquake cracks your farm in half. The (dry) ground never heals.

    You have a farm, there is a water table beneath you (some liquidity). An earthquake cracks your farm in half. The (moist) soil fills in the crack.

    You have a farm, there is an ocean beneath you. An earthquake cracks your ocean in half. You drown. (too much liquidity = hyperinflation)
    Last edited by Yvaelle; 2016-06-28 at 07:38 PM.
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  19. #79
    Quote Originally Posted by Aurinaux View Post
    I copy pasted it because that's my response lmao.

    I seriously am baffled by the point you're making. You quote increased market value of a stock as a benefit for the company to issue future shares at a higher price. So I respond to that point.

    Now you seem to be declaring a company can't issue more shares? When the company wants to issue more shares they go through an underwriter... not just during an IPO... that's when the underwriter analyzes a ton of factors to determine what price, how many, and delivery of shares.

    I'm sorry man. Maybe it is me, but I'm just not seeing the coherence of your statements.
    It is you. You think I'm talking about liquidity affecting post-IPO offerings, but it affects every offering, even the IPO. I never said the IPO was the only offering.

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    Quote Originally Posted by Yvaelle View Post
    It's not just you, I don't get it either.
    Jesus Christ.

    Secondary transactions provide liquidity. That is not hard to understand.

    Short selling is a means of providing liquidity in the market. That is not hard to understand.

    Liquidity makes stock offerings a worthwhile means of raising capital because it increases the price that shares can be offered at. That is not hard to understand.

    I'm not sure which part is the difficult one to wrap your head around.
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  20. #80
    Most of the discussions here are not really appropriate for your long term investor. As long term investors before you invest you want to ask the following questions.

    Is the company well run?

    What is the history of their stock value in the last 10 years?

    How is their revenue? And what does their backlog look like?

    Does the stock pay dividend? What is the historical rate? (It should be reinvested immediately btw)


    I do want to add a caveat. Personally, I do not own a lot of single stocks. The ones that I have are all from former employees. I do not suggest single stocks as part of anybody’s investment plan. Single stocks don't consistently generate returns as high as mutual funds do in the long-term. If you really want to own a stock for some reason (company stock, for fun, etc.), limit single stocks to no more than 10% of your investment portfolio.

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