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
Kinetics of radioactive decay | Kinetics | AP Chemistry | Khan Academy
Strontium-90 is a radioactive isotope that undergoes beta decay. Because radioactive decay is a first-order process, radioactive isotopes have constant half-lives. Half-life is symbolized by t1/2, and it’s the time required for one half of a sample of a p…
Will There Be a Recession in 2024?
We believe there’s a recession coming. The US economy will go into recession by the middle of next year. We’re going to have a significant economic slowdown. There is a Day of Reckoning coming for the US economy. You’ve probably seen enough from the mains…
12 SIGNS THAT YOU SHOULD CUT ALL CONTACT WITH SOMEONE | MARCUS AURELIUS | STOICISM INSIGHTS
We often think of our relationships as mere extensions of our daily routines, rarely stopping to consider their profound impact on our well-being. Yet, what if I told you that the quality of your relationships could be the single most crucial factor in yo…
Why Millennials Don’t Make Enough Money
What’s up you guys? It’s Graham here. So this has been a really good week. I’ve had the chance to cover my two favorite topics on the history of the universe. One would be Robin Hood’s investing platform, and number two, as you could see from the title of…
The Power Of Journaling | Stoic Exercises For Inner Peace
Journaling is the habit of keeping a diary or log about our experiences, ideas, insights, and anything else that life evokes in our minds. The Stoics have a long-standing tradition in journaling, with Marcus Aurelius’ Meditations as clearest evidence. Wri…
15 "Boring" Businesses That Can Get You to 1 Million Dollars
The less you innovate, the better are your chances of making money instead of losing it. 70% of startups fail within the first 10 years, so if you thought the easiest road to $1 million was just about creativity and disruption, you’d be wrong, my friend. …