The Usury.
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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!
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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.
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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!
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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!
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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.
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Peace JK,
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.
They could be negligible but not zero and add up with multiple trades, especially in day trading, hence cannot be ignored. For example, using the basic betting strategy in blackjack one can decrease the house advantage to about 1 %, and in craps, by making the best bets based on don't pass and laying odds, one can decrease the house advantage to about 0.6 %, but that "negligible" advantage is still large enough for the house to win and for the player to lose consistently IN THE LONG RUN.
There are tools to gauge the trend direction by technical anaylsis but that is not an exact science and is still speculative in nature.
The barriers formed by large contracts of options at a certain price are still speculative and can be broken leading to huge losses by those billionaires which they never tell you about. You might think they are consistently making money because they have not told you about their losses.
I have been interested in game theory with respect to casino games and have done extensive research on them. I have mathematically beaten some casino games (playing on computer programs) by turning the odds in my favor by using ingenious systems which I discovered after years of research, for example in roulette, blackjack, and craps, while playing within the rules of those games devised by the casinos and without cheating. On computer simulations I have CONSISTENTLY won in those games in the long run; but it still remains gambling and I hesitate to actually play those games with real money, because even while using those systems I can still lose huge sums of money with an unlucky streak.
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Peace all,
Another interesting video on the corrupted paper money system and its destructive power
http//www.youtube.com/watch?v=m2pxW7D1Vao
I agree with the conclusion that currency should be based on 100 % gold standard, but disagree with charging interest on the gold money lent as it is forbidden by the Qur'aan.
Republican Ron Paul on the corrupted paper money system
http//www.youtube.com/watch?v=ji_G0MqAqq8
Pay attention to 608 minutes onwards.
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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.
Agreed.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.
I may have misunderstood you, Tanveer, but I believe there's a difference between a privately held and publicly held companies, where most of what you stated above, I believe falls under the privately held corporations. In a publicly held arena, all information is carried out electronically every second as seen at the NYSE. How would such information be revealed to the board of directors BEFORE releasing to general public in this case? Remember, the trading is global in the entire exchange and there are literally millions throughout the world who check upon results day-in and day-out.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.
Hmmm, I don't get the gambling part in trading (buying/selling stocks). The entire Stock Exchange is based on calculated speculation and fluctuations anyways. One should be competent and knowledgeable enough to "play" the stocks.Peace!
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Peace Genteel,
I may have misunderstood you, Tanveer, but I believe there's a difference between a privately held and publicly held companies, where most of what you stated above, I believe falls under the privately held corporations. In a publicly held arena, all information is carried out electronically every second as seen at the NYSE. How would such information be revealed to the board of directors BEFORE releasing to general public in this case? Remember, the trading is global in the entire exchange and there are literally millions throughout the world who check upon results day-in and day-out.
Insider trading is carried out in PUBLIC COMPANIES. Please call your brokerage firm to confirm that !
The insider trades are those trades carried out by the Directors, Officers, or 10 % owners of a PUBLIC COMPANY. This insider trading is carried out based on information not yet available to general shareholders of the company, and AFTER the trade is carried out, it is reported within 2 business days to the Securities and Exchange Commission and is then made available to the general public. Thus there is a real time lag before this info is available to the public which is unfair for them. That is why many people think that all insider trading should be made illegal.
Please see the following
http//www.insiderscoop.com/?gclid=CI_r5YC274wCFQQfgAodO26ACw
Excerpt from the above
This insider trading information involves any changes in beneficial ownership of shares in a public company. Insiders are required to report these transactions, also known as ownership reports, to the Securities and Exchange Commission.
The Sarbanes-Oxley Act of 2002 amended the regulations governing the reporting of insider transactions in two significant ways. First, it shortened the reporting period, requiring insiders to report transactions within 2 business days. Second, it required that all reports be filed electronically.
Please also see the following for more info
http//en.wikipedia.org/wiki/Insider_trading
http//www.sec.gov/answers/insider.htm
Hmmm, I don't get the gambling part in trading (buying/selling stocks). The entire Stock Exchange is based on calculated speculation and fluctuations anyways. One should be competent and knowledgeable enough to "play" the stocks.
Gambling is also based on pure speculation of the outcome, and the rules of the game are made in such a way that the odds are stacked against the player in favor of the house, and also the payments are made less than what they should be according to the odds, which is called a vig and is considered like a "house fee". Stock prices are also based on pure speculation, and the rules of the game are made in such a way as to stack the odds against the public trader from the beginning, for example by the bid ask spread, commission fees for the trades, and insider trading for the privileged. Thus the market makers or specialists ALWAYS WIN because the bid ask spread is in their favor.
One can be competent and knowledgeable in stocks and can win sometimes, just like one can be competent and knowledgeable and win sometimes in casino games, but the fact remains that the odds are stacked against the player in favor of the house in both.
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Peace bro "tanveer",
There are tools to gauge the trend direction by technical anaylsis but that is not an exact science and is still speculative in nature.
JK- Well like i said everythings sepculative in nature, some mroe some less.
The barriers formed by large contracts of options at a certain price are still speculative and can be broken leading to huge losses by those billionaires which they never tell you about. You might think they are consistently making money because they have not told you about their losses.
JK- True u dont win 100% of the time. Thts the case for all businesses. But the overall losses of those who have the knowhow is less than 50% and thus with proper koney management they gain make money. The prob of an option barrier being broken is appx 40% or even less. Hence if you continuously only risk one percent ull have to lose 50 times in a row to lose 50% where the prob is .4^50 which is entremelyy low. You wont even live long enough to see yourself losing 50%. Moreover many ppl use a startegy tht as soon as they loose 10% they set their loss to 1% of the new now 90% left equity so it goes down even slower.
I have been interested in game theory with respect to casino games and have done extensive research on them. I have mathematically beaten some casino games (playing on computer programs) by turning the odds in my favor by using ingenious systems which I discovered after years of research, for example in roulette, blackjack, and craps, while playing within the rules of those games devised by the casinos and without cheating. On computer simulations I have CONSISTENTLY won in those games in the long run; but it still remains gambling and I hesitate to actually play those games with real money, because even while using those systems I can still lose huge sums of money with an unlucky streak.
JK- If you can turn the odds in your favor consitently then its no longer gambling. If being able to lose large sums of money was gambling then investing in any private business wld be gambling. My uncle had to pay over 100,000 Euro just to make his net cafe store set and everything for customers plus additional costs for workers, water, e?ectricity. If his business didnt work out all wld be lost. In the forex market u dont start with tht kinna money. You start with maybe 10,000 Euro and then you dont risk it all at once just 1% per trade and after every 10% loss again now 1% of tht 90% left. This way ull never go to zero and in case your astronomically unlucky and lose 50% in one year, since normally youd double it every yr, ud have it back next year and yourultimate goal would only be delayed by one yr. GOD Bless!
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Peace bro "tanveer",
I agree with the conclusion that currency should be based on 100 % gold standard, but disagree with charging interest on the gold money lent as it is forbidden by the Qur'aan.
JK- First of all the amount of currency cannot solely depend on the amount of gold a country has. What kinna unfairity would tht be? It also depends on the amount of labor especially scientific work a country is doing. Just imagine country x is extremely lazy, doesnt work but has a lot of gold whilst country y doesnt have much gold but works its ass off and has alot of scientific advancement. Shld x really be the one which should have mroe currency value and be declared economically stronger?
2ndly how can interest/rent being charged whilst lening out gold be considered Riba? Wht are the bank or gold investers supposed to do, lend it out freely? Doesnt make any sense. GOD Bless! -
Peace JK,
JK- First of all the amount of currency cannot solely depend on the amount of gold a country has. What kinna unfairity would tht be? It also depends on the amount of labor especially scientific work a country is doing. Just imagine country x is extremely lazy, doesnt work but has a lot of gold whilst country y doesnt have much gold but works its ass off and has alot of scientific advancement.
The currency does not have to be backed only by gold but any natural resource including scientific technology.
Wht are the bank or gold investers supposed to do, lend it out freely? Doesnt make any sense.
I have already answered that here
http//free-minds.org/forum/index.php?topic=12997.msg134544#msg134544
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Peace "tanveer",
Peace JK,
The currency does not have to be backed only by gold but any natural resource including scientific technology.
JK- I thought you just said in your previous post about the gold being the standard for currency or did i misunderstand something there?
I have already answered that here
http//free-minds.org/forum/index.php?topic=12997.msg134544#msg134544
JK- Ok ill go there then. GOD Bless!
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Insider trading is carried out in PUBLIC COMPANIES. Please call your brokerage firm to confirm that !
The insider trades are those trades carried out by the Directors, Officers, or 10 % owners of a PUBLIC COMPANY. This insider trading is carried out based on information not yet available to general shareholders of the company, and AFTER the trade is carried out, it is reported within 2 business days to the Securities and Exchange Commission and is then made available to the general public. Thus there is a real time lag before this info is available to the public which is unfair for them. That is why many people think that all insider trading should be made illegal.
Please see the following
http//www.insiderscoop.com/?gclid=CI_r5YC274wCFQQfgAodO26ACw
Excerpt from the above
This insider trading information involves any changes in beneficial ownership of shares in a public company. Insiders are required to report these transactions, also known as ownership reports, to the Securities and Exchange Commission.
The Sarbanes-Oxley Act of 2002 amended the regulations governing the reporting of insider transactions in two significant ways. First, it shortened the reporting period, requiring insiders to report transactions within 2 business days. Second, it required that all reports be filed electronically.
Please also see the following for more info
http//en.wikipedia.org/wiki/Insider_trading
http//www.sec.gov/answers/insider.htm
Gambling is also based on pure speculation of the outcome, and the rules of the game are made in such a way that the odds are stacked against the player in favor of the house, and also the payments are made less than what they should be according to the odds, which is called a vig and is considered like a "house fee". Stock prices are also based on pure speculation, and the rules of the game are made in such a way as to stack the odds against the public trader from the beginning, for example by the bid ask spread, commission fees for the trades, and insider trading for the privileged. Thus the market makers or specialists ALWAYS WIN because the bid ask spread is in their favor.
One can be competent and knowledgeable in stocks and can win sometimes, just like one can be competent and knowledgeable and win sometimes in casino games, but the fact remains that the odds are stacked against the player in favor of the house in both.
Yes Tanveer, after reading a few informative websites and also the ones you provided on Insider's Trading, you are certainly right about that. My bad and thanks for correcting me on this issue. ) -
Peace Genteel,
No problem bro and you are most welcome handshake