Riba as I understand
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Peace Sharp,
Anyway, the point that I was trying to make was in regards to operating a casino and the odds against players in the long run. I am not too proficient in Math or other relevant subjects but in any event involving chance, assuming it is not rigged somehow, the probability of occurence of all possibilities are the same in the long run, e.g flip a coin, two possibilities, heads and tails, 5050 chance... flip it five times and you may get any number of results, e.g (A) 4 heads and 1 tail, or (B) 2 heads and 3 tails, or maybe even (C) all 5 tails, etc.... but flip it infinite number of times or "the long run", the results would be half heads and half tails... so for the operating of the casino, where there are two possibilites of either the house winning or the players winning, the odds in the "long run" are not against any of the above possibilities but have an equal chance of occurence. But then that is just the "long run". The "short run" will probably have odds which favour one possibility more than the other.
The above is incorrect. Casinos have designed the games and made their rules in such a way that in the long run, the odds are always in their favor. You can verify this by studying the various casino games and their rules and mathematically analysing them.
In addition to that, stock market is also similar to gambling, because
- Stock prices are based on PURE SPECULATION.
- The bid ask spread is always in favor of the market maker, hence the market maker ALWAYS wins.
- High ranked corporate officers have the advantage of insider information and potential insider trading.
Thus, the game of stock trading is designed in such a way that the odds are stacked against the general public, thus being similar to gambling.
So, in summary, is it possible, however remotely, that Al-Riba may mean the Increase in one's wealth, for which no means were provided by Allah? Now I know that this implies more than just loans. It would include stolen wealth as well. To me, this make sense as Allah deprives Al-Riba of any blessing (2276).
Thank you for the excellent understanding.
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Peace Sharp,
The above is incorrect. Casinos have designed the games and made their rules in such a way that in the long run, the odds are always in their favor. You can verify this by studying the various casino games and their rules and mathematically analysing them.
In addition to that, stock market is also similar to gambling, because
- Stock prices are based on PURE SPECULATION.
- The bid ask spread is always in favor of the market maker, hence the market maker ALWAYS wins.
- High ranked corporate officers have the advantage of insider information and potential insider trading.
Thus, the game of stock trading is designed in such a way that the odds are stacked against the general public, thus being similar to gambling.
Tanveer,
I appreciate you for imparting the knowledge of casinos to me. As for stock trading, I assume that you mean stock trading involving speculation, as mentioned by Nun de plume. About the post of my mine that you quoted, I didn't that I suggested anything in favour of gambling/games of chance. My discussion on "5050" or "long/short run" was only directed at not equating it to interest purchases
I suppose my point of view from the whole discussion was that I can't equate interest purchases to gambling/games of chance, simply because interest purchases do not have any element of chance, and indicating that credit card is favourable to the banker in the longer run seems no more different than saying that a certain product is favourable to its manufacturer in the longer run.
Please understand that I do not believe by any stretch of imagination that gambling/games of chance are allowed, no matter how the odds play out, whether against the public or even in their favour. I was just trying to differentiate them from interest purchases.
And thanks again for reading my post.
Peace.
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Peace Sharp,
Please understand that I do not believe by any stretch of imagination that gambling/games of chance are allowed, no matter how the odds play out, whether against the public or even in their favour. I was just trying to differentiate them from interest purchases.
I did not mean to imply that you believe that gambling is allowed. I was just trying to correct your misunderstanding about the odds inherent in casino games.
I assume that you mean stock trading involving speculation.
What I meant was that ALL stock trading involves speculation, whether short term, or long term, because the stock price itself is based on PURE SPECULATION. Look up P/E ratios for details. The stock price at which someone buys the stock is not the ACTUAL price of the underlying shares, but only a SPECULATED price based on future speculation about its potential value. That is why when those speculations do not come true, for example when the company fails to meet its projected/expected earnings for a quarter, there can be dramatic swings in its stock price, causing people to lose millions, even though the company made a huge profit for that quarter.
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What I meant was that ALL stock trading involves speculation, whether short term, or long term, because the stock price itself is based on PURE SPECULATION. Look up P/E ratios for details. The stock price at which someone buys the stock is not the ACTUAL price of the underlying shares, but only a SPECULATED price based on future speculation about its potential value. That is why when those speculations do not come true, for example when the company fails to meet its projected/expected earnings for a quarter, there can be dramatic swings in its stock price, causing people to lose millions, even though the company made a huge profit for that quarter.
Hmmm... good point... I never thought about it in along those lines. But what if you purchase shares of a Company upon its incorporation at its offer price (implying share of its ownership) and receive a share of its dividends (share of profits)? Is that okay? If so, how does sell one sell those shares in the market if one want to dispose of those shares? Aren't market demand/supply forces in effect which are what is really affecting the prices? I mean one can't help if the other person wants to buy something from you at a higher price than what the good is worth? And this is not only limited to the share market. I mean if I am willing to sell the share at Rs. 10 in a market but the next person is willing to buy it for Rs. 15, my guess is that the equilibrium price would be Rs. 15 at which both the buyer and seller would be happy to make the trade. How much value the buyer is attributing to the shares are his own prerogative, no matter how he calculates that value.
At least that is my take on that. I am open to any input on this matter.
Peace
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Peace Tanveer,
The above is incorrect. Casinos have designed the games and made their rules in such a way that in the long run, the odds are always in their favor. You can verify this by studying the various casino games and their rules and mathematically analysing them.
In addition to that, stock market is also similar to gambling, because
- Stock prices are based on PURE SPECULATION.
- The bid ask spread is always in favor of the market maker, hence the market maker ALWAYS wins.
- High ranked corporate officers have the advantage of insider information and potential insider trading.
Thus, the game of stock trading is designed in such a way that the odds are stacked against the general public, thus being similar to gambling.
Agree with casino games are not a 5050 coin toss and rigged with a certain percentage going to the house which ?in the long run? (one person playing indefinitely or the aggregate play of numerous individuals) will earn a certain percentage of total wagered.
They have gaming simulators which predict winnings depending on rules/policies if traffic is known (amount of bets wagered) with almost certainty before building a new Casino same as money lenders are almost certain about their return. Vegas billion dollar investments are due to house advantage.
Agree there is always risk although long run stock investments have corrections are steady rising?
http//chart.finance.yahoo.com/c/my/_/_gspc
This is similar to long run investment in real estate which have similar up slopes?
http//www.andongkim.com/media1/2005/06/NYC.JPG
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Peace Sharp,
But what if you purchase shares of a Company upon its incorporation at its offer price (implying share of its ownership) and receive a share of its dividends (share of profits)? Is that okay?
The problem is that the offer price itself is partly based on speculation. In an ideal society, in which the offer price is based purely on actual earnings, and the demand/supply forces, then I guess your scenario would be ok.
The whole financial system is corrupt nowadays, based on worthless fiat currency, and needs to be entirely revamped. You might wanna take a look at this video which will blow your mind if you are not already aware of the truths you are about to see !!
http//video.google.com/videoplay?docid=-9050474362583451279&q=money+as+debt&total=1775&start=0&num=10&so=0&type=search&plindex=0
If so, how does sell one sell those shares in the market if one want to dispose of those shares? Aren't market demand/supply forces in effect which are what is really affecting the prices? I mean one can't help if the other person wants to buy something from you at a higher price than what the good is worth? And this is not only limited to the share market. I mean if I am willing to sell the share at Rs. 10 in a market but the next person is willing to buy it for Rs. 15, my guess is that the equilibrium price would be Rs. 15 at which both the buyer and seller would be happy to make the trade. How much value the buyer is attributing to the shares are his own prerogative, no matter how he calculates that value.
The problem, again, is that the stock price is not determined only by actual earnings and demand/supply forces, but also by pure speculation in the form of speculated P/E ratios, which forms a significant chunk of the stock price, and can adversely affect it even when the company makes a huge profit, as I explained earlier. If that speculation component is taken out, then I think it would be ok, but for that, the whole system needs to be revamped.
The steady rise in stock prices over years mentioned by Nun also has a speculation component, which can still cause the prices to artificially crash in case of an unforeseen failure to meet the expected/projected speculations, despite the company still making large profits. Just because stock prices are steadily rising over years does not necessarily mean they will continue to rise.
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Peace Sharp,
About intoxicants and gambling/games of chance. Personally, I wouldn't go beyond the explanation provided by the Quran about their nature, i.e. in them is great harm, and a benefit for mankind; but their harm is greater than their benefit. In my view, the assumption that gambling and drugs have a similar high on human emotions seems subjective to me. Of course, one can further research out what are the harms and benefits of both and simply weigh them against each other. But I truly believe that we will reach the same truth that the Quran has provided.
http//www.videojug.com/interview/gambling-addiction
Yes, some people may be able to handle not drinking, gambling, and sexual advances along with credit card responsibly while many will fall if it?s flaunted at them daily. Best way to deal with temptation is avoidance ? Surah 12 comes to mind.
A system of enslavement which gains are due to playing on people?s emotions such as providing them ?the high? of gambling, sex, drugs, or even a new red convertible which they can?t afford although by stretching payments with interest telling them sure you can afford it ? only $500/month for next 7 years is ill-gotten exploitation and hence the system no different IMO than operating a casino.
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Peace Sharp,
http//www.videojug.com/interview/gambling-addiction
Yes, some people may be able to handle not drinking, gambling, and sexual advances along with credit card responsibly while many will fall if its flaunted at them daily. Best way to deal with temptation is avoidance Surah 12 comes to mind.
A system of enslavement which gains are due to playing on peoples emotions such as providing them the high of gambling, sex, drugs, or even a new red convertible which they cant afford although by stretching payments with interest telling them sure you can afford it only $500/month for next 7 years is ill-gotten exploitation and hence the system no different IMO than operating a casino.
Peace Sharp,
The problem is that the offer price itself is partly based on speculation. In an ideal society, in which the offer price is based purely on actual earnings, and the demand/supply forces, then I guess your scenario would be ok.
The whole financial system is corrupt nowadays, based on worthless fiat currency, and needs to be entirely revamped. You might wanna take a look at this video which will blow your mind if you are not already aware of the truths you are about to see !!
http//video.google.com/videoplay?docid=-9050474362583451279&q=money+as+debt&total=1775&start=0&num=10&so=0&type=search&plindex=0
The problem, again, is that the stock price is not determined only by actual earnings and demand/supply forces, but also by pure speculation in the form of speculated P/E ratios, which forms a significant chunk of the stock price, and can adversely affect it even when the company makes a huge profit, as I explained earlier. If that speculation component is taken out, then I think it would be ok, but for that, the whole system needs to be revamped.
The steady rise in stock prices over years mentioned by Nun also has a speculation component, which can still cause the prices to artificially crash in case of an unforeseen failure to meet the expected/projected speculations, despite the company still making large profits. Just because stock prices are steadily rising over years does not necessarily mean they will continue to rise.
Tanveer, Nun de plume,
Thanks for your invaluable input regarding the matter of intoxicants, gambling/games of chance, trading in stock markets and credit card transactions. At some point, I suppose, the discussion about these subjects tended towards individual point of views. I respect your views on the said topics as a matter of personal preference. But to summarise, I think we all agree that the following are not approved by the Quran, no matter how we reach that conclusion
(1) Intoxicants and
(2) Gambling/games of chance.As for trading in shares and interest based transactions (including credit card transactions), as I said, each of us have developed our own point of views. I welcome and would be very grateful for any further input into these matters and the matter of "Bay`a" and "Tijara(t)" that I questioned about before.
Peace
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Peace Sharp,
From PRL at http//www.studyquran.co.uk/PRLonline.htm
= Ba-Ya-Ayn =
Selling or buying
Exchanging or exchange of property
Gaining mastery over someone, superceding or occupying their place also by superior power or force
Making a covenant, an engagement, a contract (e.g. promising allegiance, swearing, oaths)
Hire or hiring of land
Sealing the deal, also striking together hand of two contracting parties in token of the ratification of sale
Manner of selling/buying
An article of merchandiseba'a vb. (1)
n.vb. 2254, 2275, 2275, 9111, 1431, 2437, 629biya n.f. (pl. of bi'ah) 2240
baya'a vb. (3)
perf. act. 9111
impf. act. 4810, 4810, 4818, 6012
impv. 6012tabaya'a vb. (6) perf. act. 2282
LL, V1, p 321, 322
= Ta-Jiim-Ra = to traffic/trade, be in business, commerce, merchandise, dealt, sold & bought, employed property for the purpose of gain.
tijarah n.f. 216, 2282, 429, 924, 2437, 3529, 6110, 6211, 6211
Lane's Lexicon, Volume 1, pages 334, 335I have not undertaken a complete study on this, but one can study all the occurrences of these words in al-qur'aan as given above, to reach a better understanding.
Hope that helps.
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Peace Sharp,
From PRL at http//www.studyquran.co.uk/PRLonline.htm
= Ba-Ya-Ayn =
Selling or buying
Exchanging or exchange of property
Gaining mastery over someone, superceding or occupying their place also by superior power or force
Making a covenant, an engagement, a contract (e.g. promising allegiance, swearing, oaths)
Hire or hiring of land
Sealing the deal, also striking together hand of two contracting parties in token of the ratification of sale
Manner of selling/buying
An article of merchandiseba'a vb. (1)
n.vb. 2254, 2275, 2275, 9111, 1431, 2437, 629biya n.f. (pl. of bi'ah) 2240
baya'a vb. (3)
perf. act. 9111
impf. act. 4810, 4810, 4818, 6012
impv. 6012tabaya'a vb. (6) perf. act. 2282
LL, V1, p 321, 322
= Ta-Jiim-Ra = to traffic/trade, be in business, commerce, merchandise, dealt, sold & bought, employed property for the purpose of gain.
tijarah n.f. 216, 2282, 429, 924, 2437, 3529, 6110, 6211, 6211
Lane's Lexicon, Volume 1, pages 334, 335I have not undertaken a complete study on this, but one can study all the occurrences of these words in al-qur'aan as given above, to reach a better understanding.
Hope that helps.
Thanks, Tanveer. I agree this is going to take some research. But this is a good starting point.
Peace
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Selling or buying
Exchanging or exchange of property
Gaining mastery over someone, superceding or occupying their place also by superior power or force
Making a covenant, an engagement, a contract (e.g. promising allegiance, swearing, oaths)
Hire or hiring of land
Sealing the deal, also striking together hand of two contracting parties in token of the ratification of sale
Manner of selling/buying
An article of merchandiseFunny you should say that because all those remind me of
http//www.wisegorilla.com/images/african/Africa_satellite_plane.jpg
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Funny you should say that because all those remind me of
http//www.wisegorilla.com/images/african/Africa_satellite_plane.jpg
Brother OPF,
Funny you should say that, because what reminds you of
http//www.wisegorilla.com/images/african/Africa_satellite_plane.jpg
is the definition of the root of "Al-Bay`a" which Allah has permitted as opposed to "Al-Riba", in 2275. Also, what are your thoughts on this post
http//free-minds.org/forum/index.php?topic=12997.msg152484#msg152484
Peace
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Peace "tanveer" and all,
...even though the company made a huge profit for that quarter.
JK- Yes this maybe very true for small and/or new companies who open and close every now and then. Hence i suggest to only SHORT TERM invest in forex(foreign exchange; in particular on a change of interest on the main currecneies like USD, EUR, GBP and AUD). You almost always get the right direction immediately(ON INTEREST CHANGE IF AGAINST GENERAL EXPECTATIONS OR SURPRISE CHANGE) and significant leverage here allows you to make a 5% or more profit sometimes within minutes/hrs depending on the expectations of whether interest was toi be raised or not, and not risking more than 2% even if the market moves in the other direction. The danger with small companies is also THAT YOUR STOP LOSS ORDERS WOULD NOT BE HONOURED IN CASE OF A CRASH. Eg product share price at 1.45. You enter and place a SL at 1.43 which youve valvulated equals 2%. Suddenly overnight company collapses and the price rushes down to 1.2 per share. THERES NO TRADING AT ALL IN BETWEEN and although you set our stop at 1.43 your broker just ignored that coz theres no one on the other to trade. THIS IS EXTREMELY UNLIKELY WITH JOINT COMPANY STOCKS LIKE THE DAX, GOLD, SILVER and MAJOR CURRENCIES(forex) due to their high liquidity. Hence stick to those if you trade at all. GOD Bless!
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Brother OPF,
Funny you should say that, because what reminds you of
is the definition of the root of "Al-Bay`a" which Allah has permitted as opposed to "Al-Riba", in 2275. Also, what are your thoughts on this post
http//free-minds.org/forum/index.php?topic=12997.msg152484#msg152484
Peace
The specific one I boldened out is what I meant. In the quran that meaning is impossible with reference to "Al-Bay'a" because the quran doesn't sanction oppression or anything other than full measure. The quran also carries slightly more authority than Lane's Lexicon with regards to definitions of its words.
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The specific one I boldened out is what I meant. In the quran that meaning is impossible with reference to "Al-Bay'a" because the quran doesn't sanction oppression or anything other than full measure. The quran also carries slightly more authority than Lane's Lexicon with regards to definitions of its words.
Brother OPF,
It seems I owe you an apology again, on account of my misunderstanding of your post. I agree with your assertion that that particular definition doesn't complement the rest of the definitions.
Peace
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Another thing I thought of today
Trade includes buying something at ?X, and selling it at ?X+Y, i.e. adding ?Y, which would be your profit.
The above is Quranic to me because ?Y is a fixed addition/increase, i.e. it does not continuously grow.
In this thread, I suggested that "riba" does not include a fixed addition/increase. For example, A lends B ?100 and says in one year, return ?110. Even if a year lapses it cannot be increased, i.e. it can never go above ?110 (unlike compound interest today). If it cannot be repaid, it would be written off.
Note Of course, using fiat money in the first place is not right, so any scenario involving such money is not ideal.
Thoughts?
