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
Example of under coverage introducing bias | Study design | AP Statistics | Khan Academy
A senator wanted to know about how people in her state felt about internet privacy issues. She conducted a poll by calling 100 people whose names were randomly sampled from the phone book. Note that mobile phones and unlisted numbers are not in phone book…
HOW TO SPEND YOUR $1200 STIMULUS CHECK
What’s up, guys? It’s Graham here, and welcome to my channel, where some random guy on the internet gives his unqualified opinion on the most important financial matters of today. So, there’s a lot we got to discuss in today’s video, and I’m wondering if…
Phil Libin at Startup School 2013
Wow, good morning! Uh, I think this is literally the largest number of people I’ve ever spoken to. Pretty sure it is. Uh, very cool, very impressive. Thank you for coming. Um and to everyone, uh I’m super excited to talk to you. You know, Paul asked me t…
URGENT: Federal Reserve Pushes Rate Cuts, Prices Rise, Market Hits All-Time-High!
What’s up, Graham? It’s guys here, and you got to pay close attention to what just happened. As of a few hours ago, the Federal Reserve decided to once again pause any rate cuts for the foreseeable future. As a result, we are okay. In all seriousness, th…
Why Shower Thoughts Are Actually Deep
Everyone loves shower thoughts. It’s the most successful format on this channel. There’s an entire subreddit dedicated to shower thoughts and thousands of TikToks daily talking about profound ideas, paradoxes, and concepts; things that you need to think a…
Why Banks Are Collapsing (DO THIS ASAP)
Bank Regulators have seen Silicon Valley Bank in the largest bank failure since the Great Recession. Customers were rushing to take their money out. There are recent developments that concern a few Banks. “What’s up guys, it’s Graham here, and in the las…