주식 시장도 일종의 피라미드 구조일까요? 🤔

Bro is onto something. Next he’ll discover companies generate cash. Wait till he finds out stocks represent ownership. Oh boy and once he hears about dividends it’s OVER ‼️⁉️

Pyramid schemes require constant new participants because earlier payouts come directly from later ones, and they collapse when inflows stop. The stock market doesn’t work that way. Stocks represent ownership in real businesses that generate value through profits, cash flow, dividends, and buybacks. Returns don’t depend on new buyers showing up.

Losses are possible, not structurally guaranteed, and long-term investors can earn returns without perfectly timing an exit.

Pick your favorite Bernie Madoff documentary to learn more about Ponzi schemes. One of the characteristics is that there is no value being generated. The early investors provide the initial funds, that can offer people some withdrawal liquidity, but the whole operation relies on investor funds to live, because there is no business, it's all deception. Another criteria is the promise of over performance, low risk, regardless of market conditions. In comparison, the stock market doesn't pretend to promise you anything.

The stock market offers you fractional ownership in (largely) real businesses. When you buy IBM, you buy ownership rights to an actual business with employees, assets, expenditures, and customers. You know what you're buying, it is what it says it is.

The only similarity is that like any other investment asset, the price only goes up if more money buys rather than sells. So, after you buy, you need other people to buy so your investment goes up, which allows you to eventually sell. But that's not sufficient criteria to be defined a Ponzi scheme, per the criteria I outlined above.

yes, now shush.

NO!

It’s a complicated question that deserves a complicated answer one I don’t have time to unpack.

Simply put, your odds in the market are far better than in Vegas, but you’re not going to beat the big players. Just like there are professional gamblers, there are professional investors.

They don’t win because they’re lucky, they win because they’ve studied the game.

The biggest trap is overconfidence, believing you can outsmart the system. If you’re asking whether you can… you’re probably not that guy.
Buy ETFs and chill.

Yes...and no. The concept you're touching on is "what is the nature of money/value;" by extension, this also introduces "what is a "market economy?"

If you want to dive deep into the rabbit hole, "Money: A Story of Humanity" by David McWilliams is a phenomenal read. This book has influenced how I'm approaching the current market. If you're not a reader, McWilliams also has a great podcast that discusses similar topics.

"in the short term the stock market is a voting machine, in the long run it is a weighing machine"

Good, successful businesses will eventually pay their investors through dividends or buybacks, without need for new investors. If you own all of a business, what do you need other investors for? If your business does well and grows, the amount you earn grows. The stock market is largely the same, and I think it helps to think of it that way.

Sir, this is a Cas¡no.

No, this is not how the market works. It may be how bubbles work, but it's not how the market works.

The biggest ponzi there is! But some 40% of Americans don’t own any stock at all, so still plenty of room to grow, lots of new participants out there and more born each day.

>telling us what we already know