yego.me
💡 Stop wasting time. Read Youtube instead of watch. Download Chrome Extension

Stock are not backed by the company. Simple Logic


2m read
·Nov 3, 2024

Busted open, our stock went down to six. It went from 113 to six in less than a year. That whole period is very interesting because the stock is not the company, and the company is not the stock. Stocks are not backed by the company; that is why investors don't know how much their stocks are backed by.

If something is backed, it means you're going to get a definitive amount of money back for whatever you're holding, or there's some kind of accessible collateral. So if Google is trading for two thousand dollars, and the assets on their balance sheet amount to something like a thousand dollars a share, it would be fair for you to assume that Google stocks are backed by a thousand dollars.

The problem is, that's not how it works. If you look at their SEC filings, there isn't a single public company that says they will back their stocks by some defined price. So in practice, they don't have to give you anything.

Now, hypothetically speaking, stocks are backed in the sense that if Google goes out of business, liquidates, pays back their debts, and insiders, whatever's left over will go to the shareholders. The problem is, when the hell is that going to happen? And how much is going to be left over in this hypothetical liquidation?

The potential for a future liquidation or buyout are considered unfalsifiable ideas. No one can show to be right or wrong. It is pseudoscience nonsense that cannot be used in a logical debate. Hypothetically speaking, anything can happen, but you can't use a hypothetical idea to debate the observable fact that if Google crashes tomorrow, as per their SEC filings, they have no definitive obligation to pay their shareholders anything for the stocks they are holding.

More Articles

View All
Howard Marks: 5 Strategies to Outperform the Market in 2021
Or number five, you can try to look for exceptions. What I call special niches, special people, who hopefully can produce a good return with safety in a low return world. But those people are truly exceptional and not easy to find. What inning do you see…
I decided to change my life
Couple of months ago, I experienced my first burnout. I couldn’t get out of my bed. I was escaping from my responsibilities. I couldn’t do anything; I was delaying every single thing and procrastinating even from the things that I was enjoying. During tha…
The Pioneer of Ecstasy in the US | Narco Wars: The Mob
The first time I took ecstasy was in Manchester. Thinking, “What is this? This is pretty boring.” And all of a sudden, my knees just completely buckled, and time just started to stand still. The whole room is just throbbing, and everybody’s dancing, and t…
The Stock Market is One Giant Bubble. (Howard Marks Explains)
People are now convinced AI will change the world; I imagine it will. Every bubble uses widespread conviction. Everybody believes they bid the beneficiaries of a up to the Moon. It turns out it’s overdone. There’s Howard Marks, the founder of Oak Tree Cap…
Coffee: The Greatest Addiction Ever
Every man, woman, and child. The world’s largest buyer of coffee, the US, has to import nearly all of this as the coffee trees from which caffeine is harvested will only grow at commercial levels between the Tropic of Cancer and the Tropic of Capricorn in…
"He Saved My Life" American Soldier Returns to Help Iraqi Captain Fleeing ISIS | National Geographic
[Music] [Music] Ian yes for [Music] I’m very scared to lose my son, lose my daughter, lose my wife, thus all my [Music] life. The soldiers, like the captain, are the ones that kept us alive. My name is Chase Msab. I’m a veteran of the Iraq War. I did thre…