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

The Ponzi Factor: Banned on Quora


2m read
·Nov 3, 2024

The first fallacy, when I believe the most fundamental falsehood that leads to other false ideas, is the notion that stocks are equity instruments that represent ownership. Finance professionals will argue the stock market can't be a Ponzi scheme because the value of a stock represents value in a company and ownership instruments are being exchanged in the transactions.

But there's practically no truth to this idea because the value of a stock has no legitimacy. It is just an arbitrary number derived from a Ponzi exchange process, and the value is not backed by anything. A share of Google can trade around nine hundred dollars, but Google explicitly states in writing that the par value of their stock is only 0.001 cent.

Google also says they do not pay their investors any dividends, and their Class C shareholders have no voting rights. So if you own a share of Google, you won't receive any money from Google's business activities. You won't be allowed to vote on any corporate issues, and Google isn't obligated to pay you anything more than 0.001 cent for that share you bought for nine hundred dollars.

Does that really sound like a legitimate ownership instrument? If I mail you a chair that was missing three legs, the seat cushion, and the backrest, whatever I sent you, can I really call it a chair? For a value to have legitimacy, there must be someone or something in place to back that value.

The value of the dollar is backed by the United States government. The value of a house is backed by the intrinsic physical value of the house itself. But the value of stocks is not legitimately backed by anyone or anything. The idea that today's common stock represents the real intrinsic value of a company is a baseless and unproven idea.

If people are selling such an idea to make money, then it is also a fraudulent idea.

More Articles

View All
Finding zeros of polynomials (1 of 2) | Mathematics III | High School Math | Khan Academy
[Voiceover] So, we have a fifth-degree polynomial here, p of x, and we’re asked to do several things. First, find the real roots. And let’s sort of remind ourselves what roots are. So root is the same thing as a zero, and they’re the x-values that make th…
Worked example: calculating ion charge | High school chemistry | Khan Academy
So we’re asked what is the charge of a calcium ion with 18 electrons. So pause this video and see if you can work that on your own. I will give you a little bit of a tip: a periodic table of elements might be useful to see where calcium sits on that perio…
A Conversation About Crypto-currencies and ICOs with Andy Bromberg
Today is Thursday, which usually means that Adora or myself sit up here with someone notable and have a hopefully interesting conversation. The someone notable we have today is Andy Bromberg, my friend and the president and co-founder of CoinList, which i…
DoorDash's Application Video for YC S13
Hey, I’m Stanley. I’m a Stanford CS major. I did find an engineer at Facebook. Hey, I’m Andy. I’m also a Stanford CS major, and I did platform engineering at Facebook. I’m Evan. I was on the founding team of Vivo, the music video service. And I’m Tony.…
How Solving this Medical Mystery Saved Lives | Nat Geo Explores
Not that long ago, we didn’t understand why we got sick. There was no internet, and doctors were basically guessing. But then, in the 19th century, a few scientists figured it out: germs. One of the scientists was Louis Pasteur. The milk, already pasteuri…
I got a Lamborghini for a Youtube Ad
We’ve all seen them. You’re watching YouTube, minding your own business, and then out of nowhere, you’re bombarded with an ad complete with the Hollywood smile, Lamborghini, and a reason why you should watch them to the end. And so surprised that ads all …