I propose a secondary 'book value only' stock market in addition to the current

Discussion in 'Political Opinions & Beliefs' started by Patricio Da Silva, Apr 13, 2024.

  1. modernpaladin

    modernpaladin Well-Known Member Past Donor

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    Sounds like a good idea to me.

    ...but I dont invest in nor know much about the stock market.

    Personally I think we should just start with limiting buys and sells to a time limit. Theres literally no way that rapid microtransactions are doing any good for anyone but the trader. Like one transaction per company per hour or something. You can buy/sell as many at a time as you want, but you can't do it over and over again every time the price adjusts slightly. Its silly that is still allowed.
     
  2. Bullseye

    Bullseye Well-Known Member

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    Wrong. IMHO it's dishonest - those aren't your words or facts. You're turning into the Biden of the forum.
     
  3. Bullseye

    Bullseye Well-Known Member

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    Huh? Exactly where does it say you have any authority to dictate the form of another posters answer?
    Where do even mention "accountant". Read the post I was responding to.
     
  4. fmw

    fmw Well-Known Member

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    Companies are the source of book value. So you did.
     
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  5. Wild Bill Kelsoe

    Wild Bill Kelsoe Well-Known Member

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    It would never work because there's no way to determine with any credible amount of certainty the actual physical value of any given company.
     
  6. Wild Bill Kelsoe

    Wild Bill Kelsoe Well-Known Member

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    Who's it going to be left up to? The government? What could go wrong with that?...lol
     
  7. Patricio Da Silva

    Patricio Da Silva Well-Known Member Donor

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    Slow rise slow fall.It's less volatile that's the point
     
  8. Patricio Da Silva

    Patricio Da Silva Well-Known Member Donor

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    Yeah I don't like the idea of algo controlled stock purchases either
     
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  9. Patricio Da Silva

    Patricio Da Silva Well-Known Member Donor

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    Hardly, you don't have to participate in my threads.

    If I post them they are my words--I take ownership.

    if you disagree with at a point then Feel free to challenge it.

    All that matters is the argument.

    You shouldn't take your post personally, Anyway, You are anonymous, so am I. There is no you or me.

    There is only the argument

    If you disagree, state your case.
     
    Last edited: Apr 13, 2024
  10. FAW

    FAW Well-Known Member Past Donor

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    I think you have too much time on your hands.

    Similarly, we could debate as to the positives and negatives for Six Flags taking over Disney World. While we could ponder this possibility, why should we?

    There are plenty of real world issues worthy of discussing without needing to go into the realm of absurdity and make believe. Your concept will never happen. With that being the case, what is the point of this exercise?
     
    Last edited: Apr 13, 2024
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  11. Bullseye

    Bullseye Well-Known Member

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    What are you talking about - the bond market trades on fractional changes. Have you looked at any market charges that cover a few months? There is little volatility in the long run. Look at charts of NYSE or NASDAQ they demonstrate little volatility in the long run. Fact is the current market pretty much mimics what you're seeking in the long term.
     
  12. Base

    Base Newly Registered

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    Sounds like a great idea. I think you should start setting it up immediately.
     
  13. Zorro

    Zorro Well-Known Member

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    I propose that you mind your own business, buy and sell bonds if you like, at the price agreed to by the buyer and seller.

    So no, I don't want to have to ask a Leftist for permission to buy or sell a stock or a bond. Do you ever get sick of trying to unjustly control everything?
     
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  14. Zorro

    Zorro Well-Known Member

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    He's using AI as his oracle, you know, the same folks who post picture of black German Nazis and Black Nordic Vikings.
     
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  15. Grey Matter

    Grey Matter Well-Known Member Donor

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    You are having some real success with these AI inquiries.

    These applications are about to explode in the world's corporations.

    Microsoft is lacing predictive text into its email app, which I finally got so annoyed with that I went ahead and spent the 45 seconds to google on how to turn it off.

    More aggressively it is rolling out a typically flawed beta that it's named Copilot.

    Accompanying Copilot beta test licenses is a bot for Teams called M365.

    I tested it for a minute and found it lacking, but many others are very very interested in using it.

    I just now notice that if one were to drop the 3 and the 6 then we'd have the M5.

    Fans like me of the original Star Trek know how that turned out!

    I suggest investing in some land and some chickens, and cocaine.
     
  16. Grey Matter

    Grey Matter Well-Known Member Donor

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    I tested your queries on Chat GPT 3.5 and received pretty much the same results:

    What would be the effect, positive or negative, if stocks could only be purchased at book values and could only be traded at values ascertained by book values, which would be determined by accepted accounting methods at periodic intervals? Also, every stock purchase would be accompanied by a stock certificate, digital and/or print, depending on purchasers choice.

    ChatGPT
    ChatGPT
    Implementing a system where stocks could only be purchased and traded at book values, determined by accepted accounting methods at periodic intervals, would have both positive and negative effects.

    Positive effects:

    1. Increased transparency: By tying stock prices directly to book values, investors would have a clearer understanding of a company's financial health. This transparency could enhance investor confidence and trust in the stock market.

    2. Reduced speculation: Speculative bubbles and irrational exuberance could be minimized since stock prices would be directly linked to tangible financial metrics rather than market sentiment or speculation.

    3. Long-term focus: Investors might be encouraged to take a more long-term approach to investing, focusing on companies with solid fundamentals rather than short-term market fluctuations.

    4. Reduced volatility: Since stock prices would be based on more stable metrics, there could be less volatility in the market, reducing the risk of sudden crashes or spikes.
    Negative effects:

    1. Lack of flexibility: The inability to trade stocks at values other than book values could limit liquidity in the market and make it harder for investors to quickly buy or sell shares, especially during times of rapid market changes.

    2. Market inefficiency: The market may not accurately reflect supply and demand dynamics or investor sentiment since prices would be solely determined by book values, potentially leading to mispricing of stocks.

    3. Reduced innovation: Startups and companies in growth phases might struggle to attract investment if their stock prices are constrained by book values, hindering innovation and economic growth.

    4. Manipulation risk: There could be incentives for companies to manipulate their financial statements to inflate book values, leading to distorted stock prices and undermining the integrity of the market.
    The requirement for stock certificates, whether digital or print, would likely have minimal impact on the overall dynamics of the market but could add an additional layer of administrative burden for investors and companies. However, it could also enhance security and provide a tangible representation of ownership for investors.


    You
    How about this idea as a secondary alternative market instead of bonds or the current volatile stock markets? In other words, a corporation could choose this avenue for capital raising, other than the other more volatile stock exchanges, as an alternative to issuing bonds?

    ChatGPT
    ChatGPT
    Creating a secondary market where stocks can only be bought and sold at book values, as determined by accepted accounting methods, could indeed serve as an alternative avenue for capital raising for corporations, especially as an alternative to issuing bonds or participating in the current volatile stock markets. Here's how this could play out:

    1. Stability for investors: This alternative market could attract investors looking for more stability and transparency in their investments. Investors who are risk-averse or seeking predictable returns might prefer investing in companies listed on this market, as stock prices would be tied directly to tangible financial metrics rather than market speculation.

    2. Lower borrowing costs for corporations: Companies might find this alternative market attractive because it offers a way to raise capital without incurring the high interest rates associated with issuing bonds. Since stock prices would be based on book values, companies with strong fundamentals could potentially attract investors willing to buy their shares at fair values without the need for expensive debt financing.

    3. Long-term investment focus: By aligning stock prices with book values, this market could encourage a more long-term investment approach among both companies and investors. Companies might prioritize building sustainable growth strategies rather than focusing solely on short-term profits to appease shareholders, while investors could feel more confident in making long-term commitments to companies with solid fundamentals.

    4. Reduced market speculation: This market could help mitigate speculative bubbles and market volatility by anchoring stock prices to objective financial metrics. This could benefit both investors and companies by reducing the risk of sudden market crashes or irrational price fluctuations driven by speculation.
    However, there are also potential challenges and limitations to consider:

    1. Limited liquidity: The lack of flexibility in trading stocks at values other than book values could limit liquidity in this market, making it less attractive to investors who require the ability to buy and sell shares quickly.

    2. Market efficiency concerns: Tying stock prices solely to book values may not accurately reflect the true value of a company or investor sentiment, potentially leading to mispricing of stocks and inefficiencies in the market.

    3. Regulatory and enforcement challenges: Ensuring compliance with accepted accounting methods and preventing manipulation of financial statements could be challenging and require robust regulatory oversight to maintain the integrity of the market.
    Overall, while creating a secondary market based on book values could offer certain benefits as an alternative to traditional stock exchanges and bond markets, careful consideration would be needed to address potential challenges and ensure its effectiveness in practice.
     
  17. Patricio Da Silva

    Patricio Da Silva Well-Known Member Donor

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    I dictate nothing. Your, no anyone else, is obligated to participate in any thread I create. If you have an issue with it, just ignore it. If I make a suggestion, know that that is all it is.

    You responded to diablo's post who posited a simplistic scenario on how a company is valued which is essentially unreality in that he was making a mockery of how accountants arrive at a company's brand value otherwise known as "goodwill" implying that it can easily be monkeyed with and therefore it has little value given how easy it would be to manipulate, or so the logic goes, so you responded in kind with this comment:

    Yeah back in the day I was programming software our answer to that question was "what does the customer want" or "what do the specs say."

    So, in essence, you were trying to back up his comment's premise, that it's a whimsical thing, and by virtue of that whimsicality, my idea is not a viable idea because 'goodwill' can be easily manipulated. this is the essence of Diablo's and your premise, that the idea of accountants arriving at a value called 'goodwill' is subject to whimsical determination. So, to refocus what Diablo's post was about, and your attempt to back him up, i posited the question.

    So, the only reason it appears to have nothing to do with your comment, is precisely because Diablo's premise, and yours by default, have NOTHING to do with OP. Your premise is absurd, as I will explain.

    So, allow me to disabuse you of your attempt to create a myth where none exists.

    For your edification:

    FYI, "Goodwill" is an accounting term, and it's a value arrived at by accounting firms every time there is a purchase contract of a business for sale.

    IN other words, it's done all the time, according to strict rules and standards (some of which I already provided), and you are making it seem like I'm making this up.

    Therefore, the premise of Diablo's, and your rebuttals, are therefore false.
     
    Last edited: Apr 14, 2024
  18. Patricio Da Silva

    Patricio Da Silva Well-Known Member Donor

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    I think that is what I used. Did I say 'Copilot' ? I get them confused, or rather, I thought they use the same engine. But, I often check both, and their replies are very similar, in many ways. I often use one to fact check the other, and Bing, as well, which uses Chat4.
     
  19. Patricio Da Silva

    Patricio Da Silva Well-Known Member Donor

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    I'm basing 'book value of a stock' on 'goodwill plus inventory, fixtures, etc.,etc., divided by the number of stocks' and You inferred it, but in my scenario, given there are stocks involved, it would be determined by a third party accounting firm.
     
  20. Patricio Da Silva

    Patricio Da Silva Well-Known Member Donor

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    Yeah, they said that about the horseless carriage, when it arrived on the scene.

    And you know what they say about naysayers.......

    nabobs.jpeg


    And no, I haven't forgot that Spiro was once a bagman and almost incarcerated.
     
  21. Bullseye

    Bullseye Well-Known Member

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    Seems like I already have stated my case - having some program create your post for you seems lazy and unethical. Although mostly they seem buffoonishly simplistic and verbose.
     
  22. Patricio Da Silva

    Patricio Da Silva Well-Known Member Donor

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    Would, if I could.
     
  23. Bullseye

    Bullseye Well-Known Member

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    And stocks would trade every few months after every valuation?
     
  24. Patricio Da Silva

    Patricio Da Silva Well-Known Member Donor

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    You stated your case about using AI, but not anything to do with OP.

    Again, if you disagree with anything I post, state your case. that's the point, "debate".

    All that matters is the argument.
     
  25. Patricio Da Silva

    Patricio Da Silva Well-Known Member Donor

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    Okay, you don't like the idea.

    Fine.

    Next?
     

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