01-19-2018, 02:49 PM
(01-19-2018, 03:49 AM)Galen Wrote:(01-18-2018, 02:44 PM)pbrower2a Wrote:(01-18-2018, 10:51 AM)Kinser79 Wrote:(01-16-2018, 04:47 PM)David Horn Wrote: The stock market has almost nothing to do with capital formation,
Mr. Horn do you not realize that you have essentially just proved to me that you are economically illiterate? Corporations sell stock for the express purpose of raising capital to use it for whatever they want to use that capital for. Why investors buy stock from this or that corporation is pretty much irrelevant.
While the vast majority of businesses in the US are not corporations listed on the NYSE, to say that the stock market is not a means for those corporations that are to raise capital. Indeed that is the raison d'etre of stock markets in general.
Further, considering that a large proportion of businesses in the US are not corporations at all, inflation limits the ability of those businesses to acquire capital. Why is that? Because there is great difficulty to to acquire capital faster than the corrosion of value of the currency through inflation
Ignoring the issuance of new capital, stock splits and buy-backs, mergers, and various forms of restructuring (debt is transformed into ownership, the transfer of a non-initial share of stock from one person to another does not itself create capital. Thus if I buy a share of stock in Comerica, Ford Motor Company, Proctor&Gamble, Wal*Mart, Xerox, or Coca-Cola I am buying a representation of the value of the company from a previous owner. My purchase of stock on the market does not infuse cash into the company whose stock I buy.
Incorporated, exchange-traded businesses create capital through profitable operations and wise investments. Basically one buys a stock as a stream of dividends unless one is a day-trading gambler.
You have once again proven yourself to be an economic illiterate. Selling stock is but one way to raise capital. There are many privately held corporations that often got their start from the savings of one or more founders. A sole proprietorship or partnership will often save up profits in order to acquire capital equipment to improve their operations.
Founders usually formalize their contributions as stock. Did I not mention 'retained earnings', some of which are profits on the book but not in liquid form? Most businesses try to avoid being 'cash rich'. Of course there is borrowing as bonds or bank loans.
So what if I did not address everything?
...College-level business classes typically deal in public corporations that have financial statements suitable for analysis. So one is more likely to see AT&T than Koch Industries as an example in a course on accounting or finance.
Quote:Individuals will often save money for future expenditures such as retirement which is much easier to do when you don't have assholes at the Fed debasing the currency and useful idiots like you cheering them on.
It is far easier to save for retirement when one has a solid income, often the result of formal education either free or heavily subsidized, and if there is enough economic activity (including transportation on public roads) to create solid incomes for many.
Social Security allows people to make investments in high-quality common stock or to start businesses by creating some economic safety for old age.
Now who is the fool?
The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated Communist but instead the people for whom the distinction between fact and fiction, true and false, no longer exists -- Hannah Arendt.