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
How to Improve Your Life in 24 HOURS
[Music] If you’ve ever browsed self-improvement forums like on Reddit, then you’ll often come across some pretty good advice, some pretty questionable stuff—no doubt. But every once in a while, there’s a little nugget of wisdom that sticks with you, and …
Approximating dividing by decimals
What we’re going to do in this video is get a little bit of practice estimating dividing with decimals. So, for example, we want to figure out approximately— that’s what these kind of squiggly equal sign means; this means approximately equal. So what is…
Multiplying mixed numbers
Let’s see if we can figure out what 2 and 1⁄4 times 3 is. Pause this video and see if you can work that out. All right, now there’s different ways that we could approach this. One way to approach this is to recognize that if I multiply anything times thr…
Another Major Market Bubble Just Burst.
Does it do anything? It tells the time. Is the fall of luxury goods finally upon us? At the start of the year, everything seemed promising. A report from Bain & Company estimated the luxury market to reach 1.5 trillion EUR, or $1.63 trillion, globall…
Exponential functions differentiation | Advanced derivatives | AP Calculus AB | Khan Academy
Let’s say that Y is equal to 7⁄2 the x squared minus X power. What is the derivative of Y, derivative of Y with respect to X? And like always, pause this video and see if you can figure it out. Well, based on how this has been color-coded ahead of time, …
How To Use The 2023 Market Crash To Get Rich
What’s up guys? It’s Graham here. So today, we have to answer the age-old question that philosophers and economists have pondered since the beginning of time, and that would be: Am I wearing pants? And the answer is no. Just kidding! Instead, it’s whether…