Linked by Thom Holwerda on Sat 25th Aug 2012 19:40 UTC
In the News "Neil Armstrong, the first man to walk on the moon, died Saturday, weeks after heart surgery and days after his 82nd birthday on Aug. 5. Armstrong commanded the Apollo 11 spacecraft that landed on the moon on July 20, 1969, and he radioed back to Earth the historic news of 'one giant leap for mankind'. He spent nearly three hours walking on the moon with fellow astronaut Edwin 'Buzz' Aldrin." Our thoughts are with his family and friends. Such a great man. The world lost a true legendary hero today. This man will be an inspiration for generations to come.
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RE[9]: Comment by MOS6510
by kwan_e on Mon 27th Aug 2012 08:21 UTC in reply to "RE[8]: Comment by MOS6510"
kwan_e
Member since:
2007-02-18

"None of this "Company A is really worth $600 billion because the total of its shares at the current share price is worth $600 billion" nonsense.


How much is a piece of bread worth?

Whatever you are willing to pay for it...

How much is a share worth?

Whatever you are willing to pay for it...

Why do you continue to deny this simple truth? You seem to understand the concept of money, yet you think it doesn't apply to stock prices the same way it applies to everything else...
"

Wrong on so many levels. What you've highlighted is that money is a PROXY measure for how much something is worth. It's an ESTIMATE. It is not reality.

FACT: Everybody on this planet has to eat and drink.

Ultimately, all money needs to be converted to food and water. The calculation may be exceptionally complex. Ultimately, people are going to have to make that calculation. They make that calculation every time they buy food and drink and houses and petrol and electricity and gas and they compare that to their budget. This is why stock prices crash every once in a while - people realize they can no longer afford it. That value at the end of the crash? That is what people REALLY think something is worth.

FACT: Some things are more price elastic than others. Some costs are more variable than others.

The value it had before the crash is an illusion that people buy into hoping to cash out before the illusion pops. Why do you persist in this nonsense New Age bullshit that reality is whatever people think it is? You're over 40. Stop it.

Reply Parent Score: 3

RE[10]: Comment by MOS6510
by galvanash on Mon 27th Aug 2012 10:32 in reply to "RE[9]: Comment by MOS6510"
galvanash Member since:
2006-01-25

Wrong on so many levels. What you've highlighted is that money is a PROXY measure for how much something is worth. It's an ESTIMATE. It is not reality.


Your changing the definition of words to suite your arguments. Proxy != Estimate. A proxy is a substitute, something used in place of - it is not an estimation.

As far as money not being reality - we made it reality by deciding to use it in the first place. They fact that you accept payment for work done in the form of money and trade it for stuff makes it real - otherwise it wouldn't work. Its real because everyone agrees it honor it's value.

FACT: Everybody on this planet has to eat and drink.

Ultimately, all money needs to be converted to food and water. The calculation may be exceptionally complex. Ultimately, people are going to have to make that calculation. They make that calculation every time they buy food and drink and houses and petrol and electricity and gas and they compare that to their budget. This is why stock prices crash every once in a while - people realize they can no longer afford it. That value at the end of the crash? That is what people REALLY think something is worth.


That's like saying that if tomorrow someone flooded the market with cheap bread - which would drive the price through the floor - it makes today's price of bread fictitious and not "real".

Your argument is that since stocks are volatile and are prone to extreme fluctuations that this makes their value at any given time illusionary.

It doesn't. It's just an example of how valuation is only meaningful at a given moment. It is fixed in time. Today something costs X, tomorrow it costs Y... It doesn't matter if it is a stock or its bread.

Same thing.

Prices change...

If Apple's stock crashes tomorrow it will piss off a lot of investors. They will lose a lot of money. But it is STILL worth $600 billion dollars today - that is its REAL value.

The reverse can happen too you know. Stock prices can double or even triple in value in a short amount of time... I promise you when someone benefiting from an investment like this cashes out the money they receive is just as green as all the other money...

FACT: Some things are more price elastic than others. Some costs are more variable than others.

The value it had before the crash is an illusion that people buy into hoping to cash out before the illusion pops. Why do you persist in this nonsense New Age bullshit that reality is whatever people think it is? You're over 40. Stop it.


Of course some things are more price elastic than others. That doesn't make their monetary value less real - it just makes it less stable.

I can come up with 100s of scenarios where extremely stable commodities suddenly have huge price swings - it happens all the time. Does that make their current market price an illusion? The value of money itself is unstable... That does not make it an illusion.

If you really believed that you wouldn't accept it as a form of payment...

Reply Parent Score: 1

RE[11]: Comment by MOS6510
by kwan_e on Mon 27th Aug 2012 12:56 in reply to "RE[10]: Comment by MOS6510"
kwan_e Member since:
2007-02-18

"Wrong on so many levels. What you've highlighted is that money is a PROXY measure for how much something is worth. It's an ESTIMATE. It is not reality.


Your changing the definition of words to suite your arguments. Proxy != Estimate. A proxy is a substitute, something used in place of - it is not an estimation.
"

Do you not understand the concept of a qualifier? Money is a proxy measure which is ALSO an estimate.

As far as money not being reality - we made it reality by deciding to use it in the first place. They fact that you accept payment for work done in the form of money and trade it for stuff makes it real - otherwise it wouldn't work. Its real because everyone agrees it honor it's value.


Strawman. I didn't say money wasn't real. I'm saying the amount of money we assign to things wasn't real. Things are worth money. I'm debating the amount. The amount is not real for shares.

Keep living in your fantasy world if you want. No one ever became worse off by staying out of the stock market. I understand that you need to convince yourself to stay sane.

Reply Parent Score: 3