The Usury.
-
Sister Dotty,
Buying stock in an ethical company to get percentage of the profits (dividends) is ok but to trade stocks on its value is gambling because the intrinsic value of stocks is PURELY SPECULATIVE and does not depend on how the company is actually performing. That is why even when a company makes a huge profit but falls short of the expected earnings by even a cent, its stock value falls, if previous to the earnings announcement people were speculating that it would exceed or meet the expected earnings.
This is why I said earlier that MAYBE I can separate stocks from gambling. It's still hard for me.
-
Peace bro "OPF",
Jonny_K, we're assuming it's one of these modern loans where you have to pay extra for paying up early.
The problem is not that the amount payable is unknown because it isn't. The problem is that it makes a void of non-existant money, and someone has to work for that. If there is too much of that, nobody can keep up with the repayments and everything collapses - see Africa for an example. It makes economic slaves out of people, whether or not it is agreed to by both parties. The compounding interest is even worse. In certain situations, the original amount has long been paid, and all that remains is an endless supply of money for the lender in the form of interest. Is the lender earning that money in any way, shape or form? No. Is that money supposed to exist? No, because it's not likely that the borrower has the material goods needed - without that, money is only paper. In Africa, the principal has long been paid off but all those countries are still slaves to the world banks because of the interest.
JK- I dont think you got what i was trying to say. Compound Interest is ONLY A NAME given to a payment DUE TO DELAY IN RETURN. Thts why its there. It is absed ont eh concept that TIME IS MONEY which it obviously is. If you dont payback your loan fees on time in case of currencies after a yr then tht means youve now taken your fees as a further loan and you need to pay your "rent" on that too. Is it clear now? GOD Bless!
-
Peace bro "OPF",
JK- I dont think you got what i was trying to say. Compound Interest is ONLY A NAME given to a payment DUE TO DELAY IN RETURN. Thts why its there. It is absed ont eh concept that TIME IS MONEY which it obviously is. If you dont payback your loan fees on time in case of currencies after a yr then tht means youve now taken your fees as a further loan and you need to pay your "rent" on that too. Is it clear now? GOD Bless!
Must have gotten lost while reading
I can't find the words, what I mean is interest that will result in a flow of money that should not exist.
-
Peace bro "Tanveer",
Buying stock in an ethical company to get percentage of the profits (dividends) is ok but to trade stocks on its value is gambling because the intrinsic value of stocks is PURELY SPECULATIVE and does not depend on how the company is actually performing. That is why even when a company makes a huge profit but falls short of the expected earnings by even a cent, its stock value falls, if previous to the earnings announcement people were speculating that it would exceed or meet the expected earnings.
JK- Ok now we need to define ethical companies. Again this boils down to self responsibility and proper research. Reg speculation theres a certain amount of tht in EVERY APECT of our lives. To give just a simple example when you walk down the stairs in your house you SPECULATE they nobody has altered them or they wernt damaged through rotting from the rpevious day and you continue to run down as you always do. So its everywhere and GOD wants us to USE OUR INTELLIGENCE AS MUCH AS POSSIBLE and if we do that trading stocks then thts perfectly fine. GOD Bless!
-
Peace bro "OPF",
Must have gotten lost while reading D
I can't find the words, what I mean is interest that will result in a flow of money that should not exist.
JK- Well from your example tht could arise out of plain rent as well. Suppose a person who doesnt have any money signs a contract for renting an appartment. Infact thts wht happened with my grandfather. A young girl who didnt have any money signed up for an appartment in my Grandfather*s building and then she wasnt able to pay. Gave him alot of troubles. Now she says shes gonna pay it back later in stages. So tht really aint restricted to compound interest only but due to the fact of indivduals IMPROPER CALCULATION of their expenses. GOD Bless!
-
Peace sis "dotty",
This is why I said earlier that MAYBE I can separate stocks from gambling. It's still hard for me.
JK- Its really quite simple. Gambling is where you would ultimately lose if you invested your money in tht event for infinity meaning the overall prob of gaining profit remains less than 50% such as in the games at casinos unless you use illegal manipulation tactics which if you get caught can cost you your life for those are mostly mafia criminals. In the stock market your intelligence raises the prob and theres a possibility of it being considerably above 50% which means with continuous trading you make profit. Now it all depends on your research. See the difference? GOD Bless!
-
Peace bro "OPF",
JK- Well from your example tht could arise out of plain rent as well. Suppose a person who doesnt have any money signs a contract for renting an appartment. Infact thts wht happened with my grandfather. A young girl who didnt have any money signed up for an appartment in my Grandfather*s building and then she wasnt able to pay. Gave him alot of troubles. Now she says shes gonna pay it back later in stages. So tht really aint restricted to compound interest only but due to the fact of indivduals IMPROPER CALCULATION of their expenses. GOD Bless!
No, I meant a money supply purely based on no principal. As I said, those African states have paid off the original amounts long long ago - they are now paying purely the interest accumulating on the interest accumulating on the interest.
-
Peace "OPF",
No, I meant a money supply purely based on no principal. As I said, those African states have paid off the original amounts long long ago - they are now paying purely the interest accumulating on the interest accumulating on the interest.
JK- Reg Africans those are poor nations and they shld obviously be forgiven any further payments. Thts a whole other story. Say if one takes a billion dollar loan but then looses everything cld he/she ever pay tht back. Not very probable, with or without interest/compund interest. So thts totally different. Now why should a normal and healthy guy whos busines is running properly not pay the compound interest? He can see exactly how much he has to return by using the formula X initial loan, where i is the interest rate in %age and n the no of yrs. So if the irate is 5% hed know tht hed have to return appx "3.39 x initial loan" after 25 yrs. He knows this in advance if he knows the formula which every bank provides. Yes if at any time his business flops the bank must stop any further loan FROM THT TIME ON BUT HE HAS TO COME AND PROVE THT TO IT THROUGH VERIFIED INSTITUTIONS. Thts the whole pt. GOD Bless!
-
Peace JK, Dotty, all,
To give just a simple example when you walk down the stairs in your house you SPECULATE they nobody has altered them or they wernt damaged through rotting from the rpevious day and you continue to run down as you always do.
That speculation is COMPLETELY different from the PURE SPECULATION which results in wild fluctuations of stock values making them COMPLETELY UNPREDICTABLE with THE ODDS STACKED AGAINST YOU, just like gambling. The pure speculation determining the stock values turns the odds against you due to their complete unpredictability, and also the difference in buy and sell prices and the commission fees of the brokerage firms stack the odds against you.
The buy price (bid) for the trader is always higher than the sell price (ask), so that the middleman (market maker or specialist sitting on the exchange floor) ALWAYS WINS by buying at a lower price (ask) and selling at a higher price (bid). The buying price for you (bid) is the selling price for the market maker and the selling price for you (ask) is the buying price for the market maker. IN addition to that, the brokerage firm charges you a commission fee for doing the trade for you. Hence, if you buy a stock and then IMMEDIATELY sell it you will lose some money because of the difference in buy (bid) and sell (ask) prices and the commission fees.
So to win in stocks, the odds are stacked against you from the beginning JUST LIKE GAMBLING. In gambling the game is designed in such a way that the odds are stacked against you, plus they pay you less than what is expected according to the odds, which is called the vig.
Bro JK, please take a course in stock trading and work in an investment firm like I briefly have and read 20 books on gambling systems, before making false analogies and also misguiding others.
-
confused here. I feel like I am back where I started. In my gut I have felt for years that playing the stock market was like gambling. Now in this thread I feel like a ball in a pin ball machine. Stocks are gambling, stocks are not gambling, gambling, not gambling... and so on. I think I should have started a new thread instead of posting about stocks here, but I was feeling like stocks were in the same category of usury, or at least a cousin of it.
I have to put some more thought into this. Thanks for everyone's imput.
-
Peace sis Dotty,
No need to be confused. Please do your own research about stock trading as per the advice of 1736, instead of following all the "hearsays" and read some good books on it or even take a small course on it and the truth will become manifest/evident/apparent to you, God willing. !
-
confused here. I feel like I am back where I started. In my gut I have felt for years that playing the stock market was like gambling. Now in this thread I feel like a ball in a pin ball machine. Stocks are gambling, stocks are not gambling, gambling, not gambling... and so on. I think I should have started a new thread instead of posting about stocks here, but I was feeling like stocks were in the same category of usury, or at least a cousin of it.
I have to put some more thought into this. Thanks for everyone's imput.
It is gambling when you don't do your research. Long term investment is not gambling. Buying and selling like a madman based on speculation is gambling. It is also a pretty useless thing to do.
-
Peace sis Dotty,
No need to be confused. Please do your own research about stock trading as per the advice of 1736, instead of following all the "hearsays" and read some good books on it or even take a small course on it and the truth will become manifest/evident/apparent to you, God willing. !
Solid point brother tanveer. Thank you.
It is gambling when you don't do your research. Long term investment is not gambling. Buying and selling like a madman based on speculation is gambling. It is also a pretty useless thing to do.
I think I will do my research. I can say that I have more ideas about the whole issue. I really do appreciate all the imput. God bless.
-
Peace OPF, all,
How long and when do you determine the exit point ? Many people have lost their shirts even in long term investments even though they did extensive research before buying the stocks.
One can do all the research in the world and buy a company that apparently has good fundamentals, good product, good business model, and strong earnings and profits, and its stock value steadily goes up for many years. Everyone is bullish on this company and then one day the company fails to meet its expected earnings whereas the speculation was that it would meet or exceed its earnings, and even though it still made huge profits and is still strong, its stock value can plummet like a rock overnight, causing one to lose all one's hard earned money. No amount of research can predict that.
The problem is that the stock value of a company is based on pure speculation that it is going to over perform or under perform what is expected, and NOT ON THE ACTUAL PROFITS. Some companies can have poor fundamentals, no profits for years and poor business models but just because there is SPECULATION that it is going to perform better than expected, its stock value can be disproportionately high, and it can plummet overnight when it fails to meet expectations. Such companies are considered overvalued with inflated stock prices. Some companies can have strong fundamentals, good earnings and profits and strong business models, but just because there is SPECULATION that it is going to perform worse than expected, its stock value could be disproportionately low for a long time and then suddenly one day it can shoot up or can also go down further depending on the actual earnings in reference to the speculated expected earnings, irrespective of the actual profits. Stock values are thus based on SPECULATION rather than the actual strength of the company and they are not an accurate indicator of the company's real intrinsic value.
Then there is the matter of insider trading. The people actually running the company have an unfair advantage of knowing when the company is going to over or under perform and can unfairly exercise their stock options to their advantage before the general public comes to know about it. The stock exchange market has loaded the odds against the general public holders of the stock by making it illegal to trade based on insider information thus giving them a distinct disadvantage by making the rules of the game against them.
-
I think we're talking about two different things here. I'm talking about owning a stock for the sake of owning - not for the sake of trading!
-
Peace OPF,
I agree with that as stated in one of my earlier posts. I think it is ok to buy stock in an ethical company with good business fundamentals in order to share the profits of the company (dividends) and owning it rather than trading it as you have stated.
-
Hello Tanveer,
Stock values are thus based on SPECULATION rather than the actual strength of the company and they are not an accurate indicator of the company's real intrinsic value.
I believe corporations that collectively form an exchange for their stocks are based upon their strengths and weaknesses over time via economic trends (bull and bear markets), historically speaking, and thereby reveal their "speculated" intrinsic values where shareholders buy/sell their shares in good faith.Then there is the matter of insider trading. The people actually running the company have an unfair advantage of knowing when the company is going to over or under perform and can unfairly exercise their stock options to their advantage before the general public comes to know about it. The stock exchange market has loaded the odds against the general public holders of the stock by making it illegal to trade based on insider information thus giving them a distinct disadvantage by making the rules of the game against them.
This I believe happens when the company is privately held by smaller number of shareholders who trade shares amongst themselves. In publicly held corporations, the company's information is relayed every second on the exchange for thousands of shareholders to trade. The three largest stock exchange markets here in the USA are NYSE, AMEX and NASDAQ. Then you have stock brokers and agents representing reputable firms such as Merrill Lynch, Charles Schwab, Morgan Stanley, etc. that help people like us when, how much and who to invest in certain company's stocks to benefit from. They also inform us as to when to hold, advance or retreat from trading. Certainly, as you mentioned the forecast as "speculated" but like in any business venue, risk factor always remain. I lost a few thousand around six years ago, and this was due one of the inexperienced and lazy agent who represented me. I took out whatever was left with a small penalty and until today never bought any stocks but deciding to get back in. Btw, what's the difference between buying/selling shares/stocks from one company to and another and trading? Could you please elaborate on this? Thanks.Peace!
-
Peace bro "tanveer",
Peace JK, Dotty, all,
That speculation is COMPLETELY different from the PURE SPECULATION which results in wild fluctuations of stock values making them COMPLETELY UNPREDICTABLE with THE ODDS STACKED AGAINST YOU, just like gambling. The pure speculation determining the stock values turns the odds against you due to their complete unpredictability, and also the difference in buy and sell prices and the commission fees of the brokerage firms stack the odds against you.
JK- We can ignore the ones ib bold since theyr negligible at most brokers nowadays. The real issue is trend direction and yes one can certainly gain an edge here otherwise how can there be people who consistently make money by trading certain stocks? Its because they do the proper reserach, check for exotic barriers which are very unlikely to be broken since many billionaires placed options at them, etc. All this can significantly raise the probablity.
The buy price (bid) for the trader is always higher than the sell price (ask), so that the middleman (market maker or specialist sitting on the exchange floor) ALWAYS WINS by buying at a lower price (ask) and selling at a higher price (bid). The buying price for you (bid) is the selling price for the market maker and the selling price for you (ask) is the buying price for the market maker. IN addition to that, the brokerage firm charges you a commission fee for doing the trade for you. Hence, if you buy a stock and then IMMEDIATELY sell it you will lose some money because of the difference in buy (bid) and sell (ask) prices and the commission fees.
JK- Ofcourse thts true but as i said these few pips/points are negligible especially on the eurusd where oada.com offeres a spread of 1.2 pips whilst aveerage daily price movement is around 50 pips. Brokers need to and have a right to earn money for offering you the service to trade to them. If you dont like tht go and make contarcts with the banks yourself and then do it tht way.
So to win in stocks, the odds are stacked against you from the beginning JUST LIKE GAMBLING. In gambling the game is designed in such a way that the odds are stacked against you, plus they pay you less than what is expected according to the odds, which is called the vig.
JK- As ive explained this is not the case in general.
Bro JK, please take a course in stock trading and work in an investment firm like I briefly have and read 20 books on gambling systems, before making false analogies and also misguiding others.
JK- Your paiting the world balck and white. I know theres alot of fraud going on at both forex and stock brokers but tht doesnt mean there aint also honest ones. And again thts your responsibility to find out like everywhere in life. GOD Bless!
-
Peace bro "OPF" and all,
I think long term investments are no good. One should watch when theres a sudden breakout and go in tht direction for say 20 pts depending on the strength and palce a stop just a couple of pts below entry. Thats it. Risk should be no more than 1% per trade IF you trade like this daily. With the leverage your offered you can make 2-3% out of this when you win with >50% chance and lose only 1% < 50% chance. Here the odds are extremely in your favor. Youd need to trade a billion times or mroe in order to merely halve your money and you could double it easily every year. Another way is to look at exotic barriers especially on currecies. When the price nears them n is just abt 5 pips or so away u can safely take the trade n place a stop only a few pips beyond the barrier. Another high prob trade. GOD Bless! -
Peace Genteel,
I believe corporations that collectively form an exchange for their stocks are based upon their strengths and weaknesses over time via economic trends (bull and bear markets), historically speaking, and thereby reveal their "speculated" intrinsic values where shareholders buy/sell their shares in good faith.
Over time the stock price does reflect the "revealed" intrinsic values after speculation but still they are not based on the true intrinsic values (judging by the PE ratio) and they are immediately subject to FUTURE SPECULATIONS.
This I believe happens when the company is privately held by smaller number of shareholders who trade shares amongst themselves. In publicly held corporations, the company's information is relayed every second on the exchange for thousands of shareholders to trade. The three largest stock exchange markets here in the USA are NYSE, AMEX and NASDAQ. Then you have stock brokers and agents representing reputable firms such as Merrill Lynch, Charles Schwab, Morgan Stanley, etc. that help people like us when, how much and who to invest in certain company's stocks to benefit from. They also inform us as to when to hold, advance or retreat from trading.
I think you misunderstood what I was referring to. I agree that the company's information is relayed immediately AFTER it is revealed; I was referring to the company's information BEFORE it is revealed to the general public which only a few privileged people at the helm of the company are aware of, and this information is called insider information. The data about insider trades is never instantly available to the general public but lags in real time. The general public thus has an unfair disadvantage, whereas the key privileged people at the helm can misuse that data to alert one of their friends outside the company to perform the trades on their behalf.
Also, a company executive might decide to sell one's stock options based on some information about the company which has not been revealed yet or for personal reasons, thus carrying out an insider trade but this information is not immediately available to the general public as I mentioned above and lags in real time.
what's the difference between buying/selling shares/stocks from one company to and another and trading? Could you please elaborate on this? Thanks.
What I meant was that IMO it is ok to buy shares of a company in order to receive profits/dividends or to sell those shares to buy another company for the same reason, but not to buy or sell just to attempt to benefit out of the fluctuations in the stock prices themselves which are based on pure speculation and whether that speculation is actually realized or not, which will be similar to gambling.