Anonymous
Anonymous asked in Business & FinanceInvesting · 2 weeks ago

how is the stock market any different than a large rigged casino? and how stock buy backs are any different than a "ponzi scheme"?

Update:

companies buy their own stocks to allure other investors and then they sell them off "pump and dump"...is that not what we see day after day, week after week?

it is like a ponzi scheme or how different?

Update 2:

and they even have computers that do their buying and  selling just like a computer in a Las Vegas Casino? (it works on triggers?) how similar?

11 Answers

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  • 2 weeks ago
    Favorite Answer

    CEOs use the corporations free cash flow to buyback outstanding shares. This creates demand for the shares as there are less on the market. The price goes up. Then CEOs execute their stock options at these higher prices, making themselves wealthier. The corporation now has less cash to get them through situations like what we are seeing now.

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    • Lv 6
      2 weeks agoReport

      and if they have billions of dollars to play with,,,like Google or etc. they can run their stock market like a casino with triggered computer controls, etc?

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  • Ajay D
    Lv 6
    6 days ago

    mostly those people lose who are not as smart as they think and want to get money without hard work. They buy and sell frequently and lose all their money. Wise and patient people who wait, generally gain.

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  • 1 week ago

    The stock market is where investors connect to buy and sell investments — most commonly, stocks, which are shares of ownership in a public company.

    Everyone who's lost a bet or a card game has told themselves at some point.

    They just offer payouts on their bets that offer lower odds than the odds of winning. Mathematically, over the long run, on almost every casino game, the casino is guaranteed to win a certain percentage of every bet. This percentage is called the house edge.

    A stock buyback, also known as a share repurchase, occurs when a company buys back its shares from the marketplace with its accumulated cash. A stock buyback is a way for a company to re-invest in itself. The repurchased shares are absorbed by the company, and the number of outstanding shares on the market is reduced.

    A "ponzi scheme" is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities to claim to generate high returns with little or no risk. 

    If in doubt, get a form legal opinion, but personal opinion is that as long as its papered up, in advance, both sides are aware of the transaction, and it is not a sham to attract, a revolving-door of investments this is clearly not a Ponzi...

    Intel did something along these lines. 

    Intel raises 6 billion to fund buyback.

    They raised new money to buy out new shareholders.

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  • 1 week ago

    There is no inherent value in a casino. People place bets based on odds of winning. In the real world, there is plenty of inherent value in the goods and services people invest in.

    • Lv 6
      1 week agoReport

      yeah, but the "real world" is not in the zero sum game of the stock casinos

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  • 1 week ago

    The stock market is only up and down, but the human behaviors are keep changing, every person with different answer, so there is no absolute answer to answer such question.

    However, all investment decisions should be made based on Social, Psychological, Philosophical, and Historical aspects. This curriculum apply to most decisions making, not only investment.

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  • 1 week ago

    The costs, rewards and losses are higher just about no limit.

    • Lv 6
      1 week agoReport

      can you elaborate more?

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  • Brian
    Lv 7
    2 weeks ago

    Look up ponzi scheme and see for yourself.

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  • Chris
    Lv 7
    2 weeks ago

    Stock buy backs put money directly into the hands of investors to finance newer, faster growing firms that are creating new products and new jobs. This is how progress occurs.

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  • Anonymous
    2 weeks ago

    1. Because there is no "house" that has the ability to rig all outcomes.

    2. They are as different as apples and oranges.  You obviously are so uneducated you don't even know what a Ponzi scheme is, for if you did, you'd know that nobody's buying anything back in a Ponzi scheme.  Ponzi scheme's are all about selling, never buying back.  Buying back defeats the purpose.  Buying back would mean the seller would be dumping their money into buying back what they know is absolutely worthless and knew was worthless when they sold it.  If I get you to buy a worthless piece of paper from me at a price of $500 because I've conned you into thinking it'll soon be worth more than $500, even if you were willing to sell that worthless piece of paper back to me for $50, I'd never buy it back knowing it's not worth $50, or even worth $5.

    UPDATE:

    Why don't I?  I did.  And in the future, if you want to know what something is, ask that as your question.  Don't ask a different question that's a loaded question and uses terms you pretend to understand but don't.

    • Lv 6
      2 weeks agoReport

      well, okay, why dont you explain it in a logical way instead of just calling me uneducated?

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  • Mog
    Lv 7
    2 weeks ago

    That’s exactly how I’ve always seen the stock market. It’s a scam for the rich to get richer and for the poor to gamble their money away. Sure, there are a few who “win the jackpot,” but most lose their shirts. 

    • Lv 6
      2 weeks agoReport

      you have to have some pretty good money to invest good in stock market

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