This fucking LJ character exceeding. Why in the world is there a character limit to replies? No wonder LJ's inept management is being hammered into the ground by MySpace.
The "so what?" has to do with the sheer amount of money in play. The "madness of crowds" is economically destabalizing.
That's not an answer, it's a reaction. And one example of a very recent IPO dropping a paltry 7% one day is neither the "madness of crowds" nor economically destabilizing.
Sure there is. Under my proposal, there is simply less motive to take quick profits. There is still the risk of loss and the potential for gain, but this proposal would see the return of dividends as one of the motivating factors in investment.
Yep, which means less innovation and less risk-taking. The willingness to risk money in an exciting new venture is directly proportional to the potential for quick and/or significant gain. The longer you have to look down a timeline for potential profits, the less-risky in terms of investing you have to be. Good-bye venture capitalism, and good-bye exciting new start-ups, everything needs a track record and a five-year business plan. May as well buy oil.
I have to wait five years to capitalize on it; and the stock has five years - five years of potential war, pestilence, nuclear attacks, financial mismangement, crime, and god knows what - in which it can drop below my initial purchase price and leave me with less than I started.
Then sell, if you think you've made a bad investment.
Bad answer. You assumed I bought in the first place. The question is: why buy?
If you've made a good investment, you'll just need to wait five years in order to realize your profits tax-free. The longer you wait, the more profit you can keep; this enourages you to think about the tangible value of your investment, rather than the moment-to-moment feelings of the mob.
Nonsense. I don't think you know anything about the stock market, and somehow you think Google is typical of it: a newborn stock which happens to have a lot of cachet for its wild-eyed management and its self-admitted willingness to do things differently. You think stocks shoot up 100% every year or something, in which case taking 25% of a 100% gain seems good. But 99% of stocks, any that have been around more than a few years, don't shoot up over the year, they fluctuate within a stable boundary that has nothing to do with sexiness and everything to do with fundamentals. Under your plan, there is no reason to buy BCE or IBM or any blue chip stock.
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dancing_serpent
(no subject)
Date: 2006-03-01 07:41 pm (UTC)The "so what?" has to do with the sheer amount of money in play. The "madness of crowds" is economically destabalizing.
That's not an answer, it's a reaction. And one example of a very recent IPO dropping a paltry 7% one day is neither the "madness of crowds" nor economically destabilizing.
Sure there is. Under my proposal, there is simply less motive to take quick profits. There is still the risk of loss and the potential for gain, but this proposal would see the return of dividends as one of the motivating factors in investment.
Yep, which means less innovation and less risk-taking. The willingness to risk money in an exciting new venture is directly proportional to the potential for quick and/or significant gain. The longer you have to look down a timeline for potential profits, the less-risky in terms of investing you have to be. Good-bye venture capitalism, and good-bye exciting new start-ups, everything needs a track record and a five-year business plan. May as well buy oil.
I have to wait five years to capitalize on it; and the stock has five years - five years of potential war, pestilence, nuclear attacks, financial mismangement, crime, and god knows what - in which it can drop below my initial purchase price and leave me with less than I started.
Then sell, if you think you've made a bad investment.
Bad answer. You assumed I bought in the first place. The question is: why buy?
If you've made a good investment, you'll just need to wait five years in order to realize your profits tax-free. The longer you wait, the more profit you can keep; this enourages you to think about the tangible value of your investment, rather than the moment-to-moment feelings of the mob.
Nonsense. I don't think you know anything about the stock market, and somehow you think Google is typical of it: a newborn stock which happens to have a lot of cachet for its wild-eyed management and its self-admitted willingness to do things differently. You think stocks shoot up 100% every year or something, in which case taking 25% of a 100% gain seems good. But 99% of stocks, any that have been around more than a few years, don't shoot up over the year, they fluctuate within a stable boundary that has nothing to do with sexiness and everything to do with fundamentals. Under your plan, there is no reason to buy BCE or IBM or any blue chip stock.