How Do Stocks Distribute Money?

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FailedAgent, I for one believe in learning through discussion.



The apparent disconnect with this audience may have to do with a theoretical question posed to an audience of practitioners. In layman terms, these guys make a living off the stock market, so your question on the surface appears ludicrous and naive.



Awgee technically answered the question posted in the topic title: "How Do Stocks Distribute Money?"



<blockquote>People and institutions buy equities that do not pay dividends because they think someone else will want to buy those equities for more than they bought them for. That?s it. That?s all there is.</blockquote>


While this explains why people buy stocks and how the money people put into the stock market is distributed among the winners, your question in greater depth appears to be "How do companies distribute money through stocks?"



I believe the real answer, is, as you have already mentioned, without dividends (or share buyback programs, or buyouts or mergers), companies do not in fact distribute any of the profits.



The stock market of old (where one buys a piece of the company and for the associated risk shares in the profits) has been perverted into the ponzi scheme of the last decade. Modern stock trading is speculation.
 
FailedAgent,



If you are looking for some kind of factor that might explain how stock prices have risen in the face of declining dividends, I would suggest (in addition to the speculation answer already provided by awgee) a personal theory of mine: 401k plans.



Yup. If you think of the stock market over the last decade as a ponzi scheme that has continued to rise (in general, present bear excepted), it needs fresh buyers (greater fools) who believe "the current price is fair and the future price will be higher and so buying long makes you rich". At least that's what we were all told back at the company 401k plan meeting years ago when younger versions of ourselves filled out forms and chose funds with the greatest growth potential (i.e. greatest risk).



From Wikipedia (<a href="http://en.wikipedia.org/wiki/401k#History">401k history</a>):



<blockquote>The law went into effect on January 1, 1980,[2] and by 1983 almost half of large firms were either offering a 401(k) plan or considering doing so.[2] By 1984 there were 17,303 companies offering 401(k) plans.[2] Also in 1984, Congress passed legislation requiring nondiscrimination testing, to make sure that the plans did not discriminate in favor of highly paid employees more than a certain allowable amount.[2] In 1998, Congress passed legislation that allowed employers to have all employees contribute a certain amount into a 401(k) plan unless the employee expressly elects not to contribute.[2] By 2003, there were 438,000 companies with 401(k) plans.[2]</blockquote>


Back in the '80s there was vesting nonsense that made 401k plans less attractive than they are today, but it is clear that participation in 401k plans increased dramatically from the 1980's and with them a huge amount of passive fresh meat (and their wages) have joined the party. With this in mind, go look at the S&P or Dow history and compare the range [1980 - present] with any other period.



Is the growth of 401k plans and the growth of the stock market during that same period a coincidence? Could be. This is certainly not the sole factor. New plan enrollment is a slow force, and there are other factors at work, like for instance, the ebb and tide of the economy and the reign of Sir Alan Greenspan during the same period. However, I'd be interested to see the amount of money invested into equities via 401k plans over this span if anybody has such data.



If 401k participation has been a factor in the growth of the stock market through share price increases over time, have we reached a saturation point? Can we look forward to more ranks of new employees ready to fill out forms and start dumping money into the system? Time will tell.
 
[quote author="WaitingToBuyByAndBy" date=1237745205]FailedAgent, I for one believe in learning through discussion.



The apparent disconnect with this audience may have to do with a theoretical question posed to an audience of practitioners. In layman terms, these guys make a living off the stock market, so your question on the surface appears ludicrous and naive.



Awgee technically answered the question posted in the topic title: "How Do Stocks Distribute Money?"



<blockquote>People and institutions buy equities that do not pay dividends because they think someone else will want to buy those equities for more than they bought them for. That?s it. That?s all there is.</blockquote>


While this explains why people buy stocks and how the money people put into the stock market is distributed among the winners, your question in greater depth appears to be "How do companies distribute money through stocks?"



I believe the real answer, is, as you have already mentioned, without dividends (or share buyback programs, or buyouts or mergers), companies do not in fact distribute any of the profits.



The stock market of old (where one buys a piece of the company and for the associated risk shares in the profits) has been perverted into the ponzi scheme of the last decade. Modern stock trading is speculation.</blockquote>






I, for one, did not think FAs question to be ludicrous and naive. I remember having the same discussion with my father. But, I did not understand why FA kept repeating the same assumptions and question after it had been answered bya few different folks with a few different answers. Maybe FA is just bit persistent, (stubborn), like me and a few others in here?





A bit of rambling here: In my tax business, folks ask me questions. And many times those questions are framed in a manner that makes me realize that the inquirer's context is distorted or they are making false assumptions. Many, many times, I have to repeat the same answer over and over until they change their context.
 
The idea that the modern stock market is more of a Ponzi scheme based on 401K investors is actually my view of the stock market. Just two observations:



1. In the the book "The Pig and the Python" the author looks at baby boomer demographics to estimate when the market will rise due to the massive numbers of boomers needing to save for retirement, and when the market will decline due to boomers needing to spend their savings. The decline was estimated to start 2011-2015 and was later adjusted to be 2007-2009 because layoffs were forcing boomers to retire earlier than predicted.



2. Waaaayyy back in the 1950's my dad's stock broker working at Merril Lynch discovered the sad fact that ML's purpose in the market place was to hype stocks to small investors so that the big boys could get their money out of the company before the bad news hit the market. When the stock broker retired a few years ago, he hadn't changed his mind...
 
[quote author="Failedagent" date=1238036203]The idea that the modern stock market is more of a Ponzi scheme based on 401K investors is actually my view of the stock market. Just two observations:



1. In the the book "The Pig and the Python" the author looks at baby boomer demographics to estimate when the market will rise due to the massive numbers of boomers needing to save for retirement, and when the market will decline due to boomers needing to spend their savings. The decline was estimated to start 2011-2015 and was later adjusted to be 2007-2009 because layoffs were forcing boomers to retire earlier than predicted.



2. Waaaayyy back in the 1950's my dad's stock broker working at Merril Lynch discovered the sad fact that ML's purpose in the market place was to hype stocks to small investors so that the big boys could get their money out of the company before the bad news hit the market. When the stock broker retired a few years ago, he hadn't changed his mind...</blockquote>


Yeah ...

All agreed.

Do you understand that almost no one who invests in the equities markets cares? It is not a secret. See our advice to Bubblegum on the "Any recommendations on financial advisors?" thread.



As capworks and I have both asked you, what do you find to be a better investment?

What works for you?

I have asked you this twice and cap has asked once.

Is this something you do not care to answer?

If you think someone is going to tell you that the equities market is a better investment than whatever you come up with, and come up with some great reasons why you are wrong, I doubt it.
 
Most of my investment is in commercial real estate as the principal owner with other members of my family. I have always tried to earn enough through work that I could plow all my savings from real estate back into real estate. The idea is that when I retire, I can live off the rents. So far, it has been working pretty well because our debts are only about 10% of our assets and we are mostly cash based. If were leveraged like most other projects, I would not be feeling too hot.



This is a really old idea, earn money in business and plow all the savings back into relatively low return real estate. As a human being you will only be able to earn real money for a relatively short time. Those earnings need to be plowed back into a stable income producing asset so that when you get old and too tired to make big bucks, you have some relatively easy to manage income to keep you going.



I know other people who have plowed all their savings into tax free municiple bonds with the same idea. I prefer the hassles of managing comercial real estate because you get some inflation protection that is not possible with bonds.



The idea of getting rich with stock market investing? I have seen SO many people fail with this that I just can't get the nerve to do it. Theoretically it should work great. In practice? ....My advice is buy the index fund and not try to outwit the market if you want to invest in stocks. These days I am getting too old to put my money into such a volatile investment. If I was in my 20's or 30's it might make sense.
 
Real estate is just like the stock market. You have to assume that the next individual is willing to pay you more than what you paid! (which is what you said about stocks)

That hasn't always worked out has it? As a matter of a fact...real-estate is one of the worst investments on earth imo. Take a look at population growth and inflation...it correlates to the rise in value of real-estate.



Oh and while you hold 10% debt on your investment, I own 100% of my stocks. Zero debt baby!



Other than T-Bills, (which actually the WORST investment and loses money when you throw in inflation) real-estate is the second worst barely outpacing inflation.

The stock market isn't a good investment if you're not willing to put in the time to understand it. Nothing is for that matter.

Your advice to buy an index fund is a terrible one too, just an fyi.



GL to you though!
 
[quote author="Failedagent" date=1238219857]Most of my investment is in commercial real estate as the principal owner with other members of my family. I have always tried to earn enough through work that I could plow all my savings from real estate back into real estate. The idea is that when I retire, I can live off the rents. So far, it has been working pretty well because our debts are only about 10% of our assets and we are mostly cash based. If were leveraged like most other projects, I would not be feeling too hot.



This is a really old idea, earn money in business and plow all the savings back into relatively low return real estate. As a human being you will only be able to earn real money for a relatively short time. Those earnings need to be plowed back into a stable income producing asset so that when you get old and too tired to make big bucks, you have some relatively easy to manage income to keep you going.



I know other people who have plowed all their savings into tax free municiple bonds with the same idea. I prefer the hassles of managing comercial real estate because you get some inflation protection that is not possible with bonds.



The idea of getting rich with stock market investing? I have seen SO many people fail with this that I just can't get the nerve to do it. Theoretically it should work great. In practice? ....My advice is buy the index fund and not try to outwit the market if you want to invest in stocks. These days I am getting too old to put my money into such a volatile investment. If I was in my 20's or 30's it might make sense.</blockquote>


Inflation hedging, ability to leverage, can be improved, benefits to good management... One could argue that the all Real Estate portfolio is undiversified. Though If I had to pick a single asset class in which to put all my eggs, Real Estate comes to the top of the list.
 
[quote author="CapitalismWorks" date=1238221334][quote author="Failedagent" date=1238219857]Most of my investment is in commercial real estate as the principal owner with other members of my family. I have always tried to earn enough through work that I could plow all my savings from real estate back into real estate. The idea is that when I retire, I can live off the rents. So far, it has been working pretty well because our debts are only about 10% of our assets and we are mostly cash based. If were leveraged like most other projects, I would not be feeling too hot.



This is a really old idea, earn money in business and plow all the savings back into relatively low return real estate. As a human being you will only be able to earn real money for a relatively short time. Those earnings need to be plowed back into a stable income producing asset so that when you get old and too tired to make big bucks, you have some relatively easy to manage income to keep you going.



I know other people who have plowed all their savings into tax free municiple bonds with the same idea. I prefer the hassles of managing comercial real estate because you get some inflation protection that is not possible with bonds.



The idea of getting rich with stock market investing? I have seen SO many people fail with this that I just can't get the nerve to do it. Theoretically it should work great. In practice? ....My advice is buy the index fund and not try to outwit the market if you want to invest in stocks. These days I am getting too old to put my money into such a volatile investment. If I was in my 20's or 30's it might make sense.</blockquote>


Inflation hedging, ability to leverage, can be improved, benefits to good management... One could argue that the all Real Estate portfolio is undiversified. Though If I had to pick a single asset class in which to put all my eggs, Real Estate comes to the top of the list.</blockquote>


That can be said with anything and is really an unfair statement. Most individuals are not great managers and will lose money no matter what they invest in. I was under the assumption we are talking about an average population, not specific individuals. If we are going to go into the best of the best, than best equity managers will outperform best real-estate managers...hands down.



<a href="http://www.thornburginvestments.com/literature/generic_lit/TH1401_realreal.pdf">Here is an article that shows growth in various investments.</a> It's on page 3 of 4 in this PDF file. For those that don't want to read...I'll break it down for you. This is past 20 years inflation adjusted...(and I apologize, I was wrong...Real-Estate is 3rd worst not second worst.)



US Large Cap 6.63%

US Small Cap 6.34%

Municipal Bonds 4.01%

International Stocks 3.01%

Long Term Gov Bonds 2.94%

Corporate Bonds 1.48%

Intermediate Gov Bonds 1.31%

Real-Estate -0.06%

T-Bills -0.67%

Commodities -1.12%



This is speaking general terms...sure there are areas you can buy in that will outperform others...just like someone could have bought Cisco or Mircrosoft and experienced 10,000% returns!

Over a decent period of time, stocks will NEVER EVER underperform real-estate...it never has...it never will. Facts are Facts.
 
[quote author="Failedagent" date=1238219857] These days I am getting too old to put my money into such a volatile investment. If I was in my 20's or 30's it might make sense.</blockquote>


I think you just answered your own question.
 
[quote author="Failedagent" date=1238219857]Most of my investment is in commercial real estate as the principal owner with other members of my family. I have always tried to earn enough through work that I could plow all my savings from real estate back into real estate. The idea is that when I retire, I can live off the rents. So far, it has been working pretty well because our debts are only about 10% of our assets and we are mostly cash based. If were leveraged like most other projects, I would not be feeling too hot.



This is a really old idea, earn money in business and plow all the savings back into relatively low return real estate. As a human being you will only be able to earn real money for a relatively short time. Those earnings need to be plowed back into a stable income producing asset so that when you get old and too tired to make big bucks, you have some relatively easy to manage income to keep you going.



I know other people who have plowed all their savings into tax free municiple bonds with the same idea. I prefer the hassles of managing comercial real estate because you get some inflation protection that is not possible with bonds.



The idea of getting rich with stock market investing? I have seen SO many people fail with this that I just can't get the nerve to do it. Theoretically it should work great. In practice? ....My advice is buy the index fund and not try to outwit the market if you want to invest in stocks. These days I am getting too old to put my money into such a volatile investment. If I was in my 20's or 30's it might make sense.</blockquote>


It sounds like you know what works for you and are doing well with it. It looks like a heck of good strategy to me.
 
When people say that the stock market out performs real estate....well it depends on the market, and it depends on the real estate. I can honestly say that had I invested in the Dow Jones index in 1972 instead of commercial real estate that I would be a little behind in cash flow today. My father actually keeps track of this stuff, and he thinks that real estate has outperformed the stock index as of today. Last year the stock market was ahead. All in all,our actual portfolios in stock and real estate run neck and neck, just not at the same time! I don't participate much in the family stock market account.



I know this is stupid to say because it is very unscientific, but life experience is the only experience we really have. EVERY person I ever known who traded individual stocks in their own account was NEVER ahead of the Dow Jones index fund ten years after we had our "how I beat the market" talk. This is no small sample as I have had this conversation about 200 times now. I think what this means is that once a person gets ahead of the market, they will "return to the mean". If you make a lot of money in the market you need to get an exit strategy. My father is the perfect example of a person who could consistently get ahead of the market, but never knew how to quit.
 
[quote author="Failedagent" date=1238297379]When people say that the stock market out performs real estate....well it depends on the market, and it depends on the real estate. I can honestly say that had I invested in the Dow Jones index in 1972 instead of commercial real estate that I would be a little behind in cash flow today. My father actually keeps track of this stuff, and he thinks that real estate has outperformed the stock index as of today. Last year the stock market was ahead. All in all,our actual portfolios in stock and real estate run neck and neck, just not at the same time! I don't participate much in the family stock market account.



I know this is stupid to say because it is very unscientific, but life experience is the only experience we really have. EVERY person I ever known who traded individual stocks in their own account was NEVER ahead of the Dow Jones index fund ten years after we had our "how I beat the market" talk. This is no small sample as I have had this conversation about 200 times now. I think what this means is that once a person gets ahead of the market, they will "return to the mean". If you make a lot of money in the market you need to get an exit strategy. My father is the perfect example of a person who could consistently get ahead of the market, but never knew how to quit.</blockquote>


Of course it depends on the market and on the real estate. That is why I did you a favor and quoted 20 years worth of data. Should I include 100 years? I won't, because it favors you even less. If I was you, I would simply say that you and your friends failed at investing in the stock market. There could be numerious reasons for that. However, if you have succeeded in real-estate, than that is something you should stick to and be proud of. We all have our niches, but simply saying that the stock market doesn't work or is somekind of a ponzi scheme, or what not is absurd. Point is, it hasn't worked for you, and you failed. It has worked for me, or I wouldn't be in it.



If I had to take a stab in the dark, then I would say that you lost a great deal of money in the stock market...and are quite bitter about it. You are not here to ask questions to try and understand how it works. Based on the things you said, you clearly have the knowledge as to how it works. I think you are simply trying to convince yourself by telling others that it's a giant scheme...that somehow you got cheated and it's not "your fault" you lost money. Perhaps, you are trying to justify your losses in the market by being somekind of a victim. Kinda like people that lost money in the real-estate bubble.



I'm not the type to say one investment is never viable. I don't invest in real-estate because the time is not right for me...that doens't mean I won't one day. I don't buy gold, but that doesn't mean I think its' a bad investment. One day I will switch to gold and other commodities. As a true investor one should always look to maximize returns in any type of investment possible.



Anyway, enjoy your investments. Stick to what you are good at.
 
[quote author="Failedagent" date=1238297379]When people say that the stock market out performs real estate....well it depends on the market, and it depends on the real estate. I can honestly say that had I invested in the Dow Jones index in 1972 instead of commercial real estate that I would be a little behind in cash flow today. My father actually keeps track of this stuff, and he thinks that real estate has outperformed the stock index as of today. Last year the stock market was ahead. All in all,our actual portfolios in stock and real estate run neck and neck, just not at the same time! I don't participate much in the family stock market account.



I know this is stupid to say because it is very unscientific, but life experience is the only experience we really have. EVERY person I ever known who traded individual stocks in their own account was NEVER ahead of the Dow Jones index fund ten years after we had our "how I beat the market" talk. This is no small sample as I have had this conversation about 200 times now. I think what this means is that once a person gets ahead of the market, they will "return to the mean". If you make a lot of money in the market you need to get an exit strategy. My father is the perfect example of a person who could consistently get ahead of the market, but never knew how to quit.</blockquote>


Before I stopped short selling, my trading account was up about 300% in about two years.
 
Black Vault - no, your analysis of my stock market investing is 100% off. I made money from 1983- 1997 through DUMB LUCK and I was so smart I knew it was DUMB LUCK (Pfizer). That was my point. There is no winning or losing this argument for another ten years. That is also my point. It ain't over till you CASH OUT for good. Will you know when to quit?



Dumb luck point number three..there are three real estate markets, no market at all, the world market, and the California market. Even in today's market,but maybe not tomorrow's, the California commercial market has held up well. DUMB LUCK for me because I was born here, and I have learned, boy have I learned, not to drive too far when finding investment real estate.



A big factor in real estate statistics is that raw land is a heavy factor in the overall real estate return equation. I never recommend buying land. Another factor is that the overall return in real estate is heavily influenced by residential real estate. Bwahahahahaha! Oh yes, if you want to deduct 20 years off your life span, invest in single family rental homes! Lots of them.....oh I have to stop laughing, my sides hurt so much... I think if there was an index that tracked California metropolitan light industrial real estate and the stock market over my lifetime,you would find what we have found, they run neck and neck. After the first BIG earthquake the stock market will do way better and you will be a clear winner in investment strategy. Believe me, I don't laugh at stock market investors, I just think you need to understand that you will not be smarter than the market for long. Develop an exit strategy if you are trading individual stocks. Assume investors will eventually figure your best strategies out and drive your strategy into the red. Knowing when to GET OUT is the sign of a real trader.





Another point is that the stock market used to highly value dividends. Now it doesn't. I think that this does not bode well for long term appreciation of stock values for the rest of my lifetime, 20-30 years. You don't care about this, fair enough. Just think of my viewpoint as part of the overall investor psychology that you need to keep track of to help your investments. Information is money. Discussion is good.
 
[quote author="Failedagent" date=1238322555]Black Vault - no, your analysis of my stock market investing is 100% off. I made money from 1983- 1997 through DUMB LUCK and I was so smart I knew it was DUMB LUCK (Pfizer). That was my point. There is no winning or losing this argument for another ten years. That is also my point. It ain't over till you CASH OUT for good. Will you know when to quit?



Dumb luck point number three..there are three real estate markets, no market at all, the world market, and the California market. Even in today's market,but maybe not tomorrow's, the California commercial market has held up well. DUMB LUCK for me because I was born here, and I have learned, boy have I learned, not to drive too far when finding investment real estate.



A big factor in real estate statistics is that raw land is a heavy factor in the overall real estate return equation. I never recommend buying land. Another factor is that the overall return in real estate is heavily influenced by residential real estate. Bwahahahahaha! Oh yes, if you want to deduct 20 years off your life span, invest in single family rental homes! Lots of them.....oh I have to stop laughing, my sides hurt so much... I think if there was an index that tracked California metropolitan light industrial real estate and the stock market over my lifetime,you would find what we have found, they run neck and neck. After the first BIG earthquake the stock market will do way better and you will be a clear winner in investment strategy. Believe me, I don't laugh at stock market investors, I just think you need to understand that you will not be smarter than the market for long. Develop an exit strategy if you are trading individual stocks. Assume investors will eventually figure your best strategies out and drive your strategy into the red. Knowing when to GET OUT is the sign of a real trader.





Another point is that the stock market used to highly value dividends. Now it doesn't. I think that this does not bode well for long term appreciation of stock values for the rest of my lifetime, 20-30 years. You don't care about this, fair enough. Just think of my viewpoint as part of the overall investor psychology that you need to keep track of to help your investments. Information is money. Discussion is good.</blockquote>


Your investment in Pfizer was DUMB LUCK. However, there are individuals that studied Pfizer and their pipeline, and decided to make an "investment". They positioned themselves in a way to make money. While you just threw a dart and it happen to be a bullseye. I'll give you another example. There are individuals that got lucky with Microsoft and Cisco systems back in the day. However, there are individuals that constantly look for the next "big thing". In Microsoft's and Cisco's example, it would be the computer/internet, the communications era. There are individuals with a vision as to how a computer and perhaps internet will change how we live today. You see, I'm the one that constantly searches and looks. You're the one that throws darts in the dark. I don't for one second believe you stopped at Pfizer. You got lucky with Pfizer, then lost it all in the tech crash...probably bought Ariba Software for like 2K a share and watched it go to 2 bucks. You probably gave it one last shot, and lost the rest of your invesments in the current crash. While I profited from it.



Like I said, you don't know how to invest in the stock market. You are a failure at it. You don't have to go past your avatar name to see that.



How can it catch up to me? Rarely are my investments not delta neutral. If I use capital to buy stocks...you won't catch my invstments not protected by puts/covered calls. There are significant techniques and strategies you can use to virtually eliminate risk. DOW can go to 0 and I'll lose like 5-10% max...I don't lose money. You think I'm cocky? Maybe a little, but I'm extremely confident in my ability to interpret the market...I drink, eat, breathe and live the market. I mean I have to be confident right? How else can I live off the stock market the past 10 years...it is what I do.



Go educate yourself on derivatives and delta hedging. (yes educate yourself. If you knew what derivatives were, you wouldn't make such foolish statements.) Then come back and tell me you can't consistently make money in the stock market. As far as your dividend comment...LOL, you're kidding right? Go learn to write some calls...there is your dividend.



Just like texas hold-em...when do you cash out? Well if you're good at it, answer is never. You're the guy that I take money from, and I thank you for it!
 
FailedAgent - In the casino there are different games and different types of players. There are folks who play craps or slot machines. Sometimes they get lucky, and most of the time they don't. That is what mostly happens in the casino and on Wall Street.







And then there are the poker tables. And there are pros at the poker table, some better than others, and there are the amateurs at the poker table. The pros will always take the amateur's money, and whatever luck may be involved in how the cards fly is 100% neutralized by how the pros play the other players. There is some luck involved when the pros play each other, but mostly it is a matter of who is the best poker player.







IMO, you are lumping all the games and players together without realizing there is a difference. BV is a pro, and when the amateurs play his game, he will take their money.
 
BV - Ed Thorpe did not beat the market by his covered investments, he beat the market by charging other people money to manage their investments. Ed Thorpe was a probability mathematician, who do you think taught him the statistics and computer programing he needed to know and who gave him his seed money in 1970 to get his computers going? I might be far more educated about covering market positions than you think. If you want to get personal with me about your incredible investment advice you need to CALL ME IN 10 YEARS, not before. This is conversation number 201, I am only reporting what I actually see, a narrow personal example.



If you insist on getting personal, why are you so insistent that I must be bitter? What are you trying to prove? This should be a discussion. Do you now want to discuss personal motivations?I think you would need more data. I am not bitter about my market investments, I am bitter about the absurd percentage of money that goes to ONE man at the top of the food chain in a modern corporation. I am bitter that a CEO can stuff the pipeline and not go to jail, but be rewarded for stealing other people's money., blah, blah blah, it is unfair and I could go on forever. That stuff pisses me off so much I won't play. There is another aspect to this, what does a day trader do to earn money? I love the fact that there are only two professions in the religion Falun Gong that you are not allowed to do, day trading and national level politics. Both cause inevitable bad karma. Making money is not the only game, how you make it is even more important. It still bothers me to no end that I have not been successful in manufacturing. To me THAT is a failure. Until I can create something new and create jobs successfully, I will always be an economic failure no matter how much money I have. I live by a different standard than you and you won't be able to change that. I am proud that I at least tried to do what I saw as the right thing, I know I could have made more money doing other things, it just wasn't attractive to me.



I think you may be deliberately misleading people with your market strategies. I have seen all this stuff and it just doesn't seem to work on the level of a personal investor. Where are the customer's yachts? It only seems to work for people getting paid to do it with other people's money. Sorry, that is what I have observed. Hope you do better. Really.



Awgee- I have been surrounded by market professionals my whole life. Yep, I don't play with them, but I have observed their performance. These guys don't make a LOT of money trading their money own for more than a few years. I mean, you may certainly know better than me, but dang, I just never SEE it. Usually "market professionals" make their money on some sort of comission for handling somebody else's account. I have DEFINITELY seen people make 2-3 million in the market investing their own cash, but next year or two they turn that into 1 million before they decide to get out of the game. The fact that they started with 100K STILL means they are successful, but here is the pattern:



1. Make lots of money with a trading scheme

2. Keep trading several more years with the old scheme or new ones

3. 10 years after making the big bucks, they are not ahead of the Dow Jones index



I am really not kidding when I say I have had this conversation about 200 times. All I can say is call me in 10 years. I certainly cannot defend my position with any other form of logic. It is just what I have observed.
 
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