Vlog: The Ponzi Factor book update (Oct 2020)

Hello everyone, this is Ton again. I want to do a quick vlog about updates for the book. I know that a lot has happened this year, and I will address some of that in the update, but not everything because a lot of it's still developing.

But I do want you to know that I'm still around, I'm not going anywhere, and Wall Street is still in my crosshair. So the main thing I want to talk about is that I updated the book with an epilogue and also a preface section to address some of the government's actions with respect to the coronavirus.

So rather than telling you what I did, I'm just going to go ahead and read the preface section that essentially covers all this. So here we go:

Preface

The Positive Factor is the most comprehensive research ever compiled on the negative sum nature of capital gains, the money people make from buying and selling stocks. Unlike other finance books, this book does not assume stocks are ownership instruments. It investigates the ownership assumption and asks: why are stocks ownership instruments if the owners never receive money from the companies they own?

History shows that the association between stocks and ownership came through dividends, a profit-sharing agreement between the shareholders and the businesses they owned. This is also why all stocks paid dividends before the 1900s. The idea of non-dividend stocks is a new concept that came about over the past century.

At some point, the academics and regulators decided it was okay for companies to issue stocks and avoid paying investors indefinitely. But their acceptance of this new form of ownership, Ponzi assets, was through tradition and possibly corruption, but not through any research or logic.

The sad truth is people in finance do not study history and don't know the difference between a value that comes from the exchange of money, a cerebral idea, and the money that is being exchanged, a possessible item. The product of this ignorance is a system and culture that treats Ponzi assets as ownership just because they are printed by a company.

It doesn't matter if the company makes money, loses money, pays nothing, or prints as many shares as they want. If a company prints it, it's ownership. This kind of shoddy logic doesn't work in other industries, but it's a norm in finance.

The Ponzi Factor is also one of the shortest finance books ever published but also debunks the foundational ideas in textbooks. All the concepts in this book are based on self-evident logic, observable facts, and history, which is why it can be understood by anyone from any background at almost any age.

If a kid is mature enough to run a lemonade stand, that kid will understand the information in this book. You will enjoy this book if you are a curious person because it will reconnect you with your intuitive understanding of ownership. But if you are a finance junkie who thinks stocks are ownership and you don't care why, then you're not going to like what you learn.

This October 2020 update will include this preface and an epilogue to briefly address the government's response to the coronavirus. The manuscript itself will not have any updates and remains unchanged from the version that was released in 2019.

The main thing I want to address is that The Ponzi Factor was written under the assumption that the government and regulators were ignorant or neutral but not dirty. However, the government's response to the coronavirus showed that the SEC, Federal Reserve, and Treasury are dirty cops who will do whatever it takes to keep Ponzi assets from collapsing.

We should acknowledge the system for what it is: unfair, unethical, and immoral. But we also need to think about how to live with it. Ponzi assets may not be ownership, but the US government is backing them; they're not going anywhere for the foreseeable future. So take advantage of it.

By the end of this book, you will understand exactly how stock prices are derived and why finance degrees and concepts like valuation are. This can help you make better gambling decisions because you'll know how to filter out the industry's noise. Ultimately, I don't care what people do with their money; I just want to know the truth about how the stock market works.

That's the new preface section, and I also addressed some additional things in the epilogue. The main thing I wanted to also point out in the epilogue is that if you ask me what to invest in, like, two years ago, I would have probably said, well, I would have definitely said get a non-Ponzi asset, like a legit dividend stock, like IBM or Lockheed Martin.

But now, given what we know about the government's involvement, I also want to make it very clear to people that Ponzi assets, like Tesla and Shopify, have unrealized returns that far exceed legitimate dividend stocks. So you all do what you want with that information.

If you don't want to invest in Ponzi schemes, there are legit dividend stocks out there. But I'm also going to, of course, point out that serious Ponzi schemes have returned more money, perhaps to earlier investors, and definitely return a lot more in unrealized returns to both earlier and current investors.

So you all do what you want to do with that information. And again, I apologize for being absent, but I'm still around and I'm not going anywhere. So until next time, bye.