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
Average atomic mass | Atoms, isotopes, and ions | AP Chemistry | Khan Academy
The thing that I’ve always found amazing about chemistry is it’s an entire field of science that we as human beings have developed to actually understand what is happening at an almost unimaginably small scale. In particular, we’re going to be thinking ab…
Sailing through the Ice Gauntlet: The Maze of Icebergs | Explorer: Lost in the Arctic
This was a town. Some kind of a whaling station. Totally abandoned now. Look at this. This is what I’ve been looking for right here. An iron bollard in the shore, where Franklin tied up their ships. And this was the last anchorage for the Franklin expedit…
Kevin Hale - Startup Pricing 101
This was a highly requested talk from last year, or lots of people had questions about pricing or were really confused. It’s actually was well requested both at YC itself—that’s a very, very popular workshop that we run. We’re gonna go over a lot of basi…
#shorts How Will Robots Affect These Jobs?
Robots don’t pay taxes or even spend money in the local communities. They should preserve their jobs. My question to you is, can they stop progress? Uh, first of all, there’s no evidence that that’s true. There have been lots of studies on automation in …
Homeroom with Sal & Katy Knight - Tuesday, October 13
Hi everyone, Sal here from Khan Academy. Welcome to the Homeroom live stream! We had a little bit of a hiatus, but now we are back. I had a torn calf and other things, but I’m almost fully recuperated. But thanks for joining! We have a really exciting con…
Homeroom with Sal & John B. King Jr. - Tuesday, August 25
Hi everyone! Welcome to the Homeroom live stream. Very excited about the conversation we’re about to have. But before we jump into that, I’ll make a couple of my standard announcements. First of all, just a reminder that Khan Academy is a not-for-profit …