What is Digg?156 Comments
- oOLiquidNightOo, on 02/08/2008, -0/+65when people try to rationalize the volatility of the stock market i always think of this story:
Once upon a time in a village, a man appeared and announced to the
villagers that he would buy monkeys for $10 each.
The villagers seeing that there were many monkeys around, went out
to the forest, and started catching them. The man bought thousands
at $10 and as supply started to diminish, the villagers stopped
their effort.
The man further announced that he would now buy at $20.
This renewed the efforts of the villagers and they started catching monkeys again.
Soon the supply diminished even further and people started going
back to their farms.
The offer increased to $25 each and the supply
of monkeys became so little that it was an effort to even see a
monkey, let alone catch it!
The man now announced that he would buy monkeys at $50.00! However,
since he had to go to the city on some business, his assistant
would now buy on his behalf.
In the absence of the man, the assistant told the villagers. “Look
at all these monkeys in the big cage that the man has collected. I
will sell them to you at $35 and when the man returns from the
city, you can sell them to him for $50 each.”
The villagers rounded up with all their savings and bought all the
monkeys.
The man and his assistant were never heard from again. - Discerneth, on 02/08/2008, -1/+35If you think an economic recession cannot possibly alter your life, you might be in for a rude awakening.
That being said, not only can a recession potentially improve society by lack of material indulgence, but, like the poster above me said, it's a greater opportunity to buy stock low and watch it rise over your lifetime. - TomK88, on 02/08/2008, -7/+34Welcome to the business cycle.
- ThinkBox, on 02/08/2008, -5/+29I means... we need to wait for the world economy to "bottom out" as well, and we can all start again from a new economic base-point. You will see a lot of price stock adjustments. Apple FELL hard in the stocks, because it was way over-valued, BUT Apple was consistently BEATING its earning records by 30% quarter after quarter. People then projected even FARTHER ahead, and Apple beat them AGAIN AND AGAIN, but you can only stuff so many iPods into people's stockings before the market is saturated with products. The market falls, people are spending LESS money because the economic situation leaves them with less money to spend - this, less Apple products to buy - so they cant keep growing by more than 30% each quarter. So, when they miss their estimates once... people lose faith, they pull out. And until the whole market goes back to prices that accurately reflect the world market, and these companies have readjusted their earnings forecasts - then we can start to see some growth in these markets.
See, value investing isn't really effected by all these issues. Researching REAL companies with a strong future. And then putting money into LONG TERM companies that are highly rated.
Serious full time investors always go visit these companies, talk to CEOs and figure out where they are heading and if you can trust them. Integrity, character, and charisma in leaders will sell products, and make dedicated employees and eventually rise back on top in the market.
-That is how you choose a stock. - ITS ALL ABOUT FUTURE VALUE.
P.S. - the more you learn about the market, the more you realize that its something that you almost cannot do successfully while having a full time job and other major responsibilities. Having people manage your money for you is the best investment you can make. It isn't about quick buys and easy money. Stocks paid my way through 4 years of college, and I'm 23 and I'm a senior in Photography and Film, so I'm no finance guru by any means (and as I'm sure the comments below me might point out). So working with good investors can turn a small chunk of change into real value with real companies over time. Best thing you can do is teach your kids about the true value of the market and how its all based on real business, not just magic money that floats through tubes. - deadowl, on 02/08/2008, -1/+16Well, what this recession is:
1. home prices get high
2. gas prices get high
3. marijuana get high
3. gas prices interfere with repaying loans
4. people go into debt
5. people in debt spend less money
6. you stop making money selling things to people because they're in debt
7. you go in debt
Of course, this really depends on which particular industry you're in. For instance, you would have to be a retard to stop investing in technology because of a recession, though revenues may decrease. - otbeverly, on 02/08/2008, -1/+15Having money - enough of it, no less - and people to manage and it paid your way through college? ... you're 23 ... working with good investors can turn a small chunk of change into real value with real companies over time? ... how long have you been playing the stock market? Since you were 14? You don't earn enough to pay for college off the profits of your earnings from a paper route.
You must be a trust fund kid - mutiger, on 02/08/2008, -4/+16You know, this is exactly part of what the problem is: people wanting pat answers to stuff most people already know. Instead of feeding people this, and people buying it as 'wisdom,' what really needs to happen is the people of every country should understand what fiat currency is and how central banking works. i just got called an ignorant ***** because i wasted 20 minutes trying to correct a 21 year old american's statement that 'investment decreases value;' for the life of me, i couldn't get that guy to understand that a government printing more money doesn't make it an investment. x_x
- shig, on 02/08/2008, -2/+14You should have thought about that before you decided to be America's hat.
- inactive, on 02/08/2008, -0/+10or 7 years at the most...
- Roryking, on 02/08/2008, -2/+12looks like someone can't manage a credit card
- robbh66, on 02/08/2008, -2/+12The economics professor quoted in this article is David Fiorenza (http://www.villanova.edu/artsci/psc/facstaff/mpa_f ... He has a BS in Finance and MBA in economics.
I have a BA in Political Science and am currently getting my MBA. Calling him an economics professor is like calling me a law student. Finance and an MBA may be related to economics about as much as political science and MBA to law. I'm taking economics classes, but that wont make me an expert, just like the numerous business law classes i've taken doesn't make me a law student.
Buried. - ThinkBox, on 02/08/2008, -0/+9What insight!
- DjViral, on 02/08/2008, -9/+18ill tell u what to do. Vote Ron Paul. someone who knows what to do.
- CTK14A, on 02/08/2008, -3/+12Yeah yeah. Bring me some more flapjacks, Francois, I've got a long day of productive American work ahead of me.
- Brad324, on 02/08/2008, -5/+14Listen, if you guys are gonna recess and all that down there, we in Canada don't want you ***** our ***** up.
- Roryking, on 02/08/2008, -0/+9I, for one, plan on raiding the stock market. Someone pass me my tophat and monocle!
- inactive, on 02/08/2008, -0/+9I haven't made a big purchase in months. All I do is buy snacks....
And chill in my underground command center (aka moms basement) - dealseeker, on 02/08/2008, -0/+8For you, they'll be cheaper.
- wiigamesblog, on 02/08/2008, -9/+17my tip for you: buy a bunch of can food when they go on sale, in case you get fired, you can still eat
- mofomojo, on 02/08/2008, -1/+9>"Well, if you haven’t figured this out already, you should probably be careful with your spending because of the whole you-might-lose-your-job thing. Or, you can sell everything, buy nothing, put your cash under the mattress and rock back and forth in the corner like Demi Moore did in St. Elmo’s Fire."
Or you can openly speak out against the administration that is bankrupting the country through frivolous spending, frivolous tax-cuts, and insane wars that leave us all broke. Since nobody is alive to remember anymore, the French Revolution happened when versailles went bankrupt. All our tax dollars goes towards, as the republicans want it : 90% "defence" (war), 9% "domestic security" (police) and 1% administration costs (salaries). That's the "free market" for you. economic boom, economic crash, then war. Repeat. This isn't the "natural pattern" or "natural psychology" of normal human beings, it's what these people plan to do so they can make money.
Sounds like a ***** deal that Americans shouldn't accept. Nobody should have to accept that type of crap anywhere, anymore. Not in Canada, not in France, not in Nigeria, not anywhere. But they do. So, what I'm saying is, politicians are rarely trustable to deliver democracy and to represent their constituent voters and citizens.
Outright economic deception is the fault clear at hand, something that should be cleared up immediately, with honesty. - sodoh, on 02/08/2008, -0/+8Actually it is, just not directly in the sense he described. Wait until you need new schools or infrastructure.
- JanYpe, on 02/08/2008, -0/+8"3. marijuana get high"
That's kind of the point isn't it? - DrMonkeyLove, on 02/08/2008, -0/+7OR...you could leave your money in a bank account where it most likely can get AT LEAST 3.5% a year, and then, IF you lose your job, you can take it out then after it has accumulated interest, thus leaving you further ahead than if you just bought a bunch of food. Sure, 3.5% is about the rate of inflation, so you're not that far ahead most likely, but at least you didn't waste a bunch of time stocking up on food you most likely will never need. Or you could build a bomb shelter, stock up on ammo and food and prepare to defend yourself from the hordes. Whatever floats your boat.
- darienphoenix, on 02/08/2008, -0/+7Profit!
- jerbaker, on 02/08/2008, -0/+7Even at a 30% rate of return, which is not possible with any responsible investing, you would've had to start with more than $10,000 in order for your investments to have paid your tuition for the next four years. Most people don't have access to $1,000 in disposable income, let alone $10,000.
- WarrenWhitlock, on 02/08/2008, -5/+12best tip: They always go away if you ignore them long enough
- TomK88, on 02/08/2008, -1/+8If you don't know about the market, buy index funds or ETFs. Why pay somebody a fat commission to try to beat the market? Basically nobody can do it consistently.
- rolf, on 02/08/2008, -1/+7Be happy you understand it. Many people operate under "ignorance is bliss" and would rather keep their head down and end up working harder for much longer to get to a poorer result.
- Roryking, on 02/08/2008, -0/+6Plausible...
- Berkana, on 02/08/2008, -2/+8Recessions happen because of money supply contraction. In a nutshell, from the very root of the problem:
Our monetary system permits banks to practice fractional reserve banking (http://en.wikipedia.org/wiki/Fractional_reserve_ba ... ), where they are permitted to loan out 9 times the amount of money they actually have on deposit. In other words, they MAKE money as bank credit, money they don't have on hand to loan, which they lend to the borrowers at interest. Over 95% of the money we have in circulation is made this way, out of bank credit lent out by private banks. Increased borrowing results in a growth of the money supply, and when the money supply grows too quickly, the economy reacts by inflation, where every additional dollar created and put into the system makes all existing dollars worth less.
However, the money lent out is always less than the money the borrowers owe the bank, and eventually, simply by the repayment of loans with interest, the pool of borrowers ends up not only removing the money they added to the money supply, but the interest amount on top of that. That results in a contraction in the money supply.
Contractions can be caused by making it less appealing to borrow money; by charging higher interest rates, more people will be discouraged from borrowing money. Without more people going into debt to put money into the system, the mere repayment of loans takes money out of circulation. Remember: the money loaned out is NOT existing money the bank has on hand; in fractional reserve banking, the banks create money while only having a small fraction of the amount they loan out actually in deposit. When the principal amount of this money is paid back to the bank, it ceases to exist; just as check-book money is created by the loan, it is un-made when the principal amount is paid off.
See this documentary for the full explanation: http://www.digg.com/business_finance/Our_Debt_base ... - skew009, on 02/08/2008, -0/+6At least someone gets it! With every market downswing, recession, or depression someone profits off it. Usually it's those who control the market...
- rolf, on 02/08/2008, -1/+7Except we're at 9 trillion dollars debt last time we checked and with baby boomers retiring, a flood of social security and medicare payment will hit us in the next few decades to the tune of 53 trillion.
- inactive, on 02/08/2008, -0/+5So what, you're suggesting that ninjas are crippling the US economy with knives and stars? Wow...
- JohnFlux, on 02/08/2008, -0/+5Or you get ill.
- wilhoitm, on 02/08/2008, -0/+5Does a recession mean that it is going to harder or easier to pick up hot women?
- Amadeus2490, on 02/08/2008, -2/+6When pressed for comment, George W. Bush responded "If it's warm, I hope we can have recession outside!"
- Aensland, on 02/08/2008, -0/+4The sight of that tshirt always cracks me up.
- DCB360, on 04/11/2008, -0/+4Recession means repaying debt. Lawl!
- DiscoLando, on 02/08/2008, -0/+4Someone help me out... do people spend less because there is a recession, or is there a recession because people spend less?
It seems like a self fulfilling prophecy. - haterrade, on 02/08/2008, -0/+3Don't US workers already work from the start of the year to April 1st or so just to pay off yearly federal income taxes? What's another 6 months?
- JanYpe, on 02/08/2008, -0/+3So corporations don't have to pay other businesses anymore? And they don't have to pay wages either?
- mutiger, on 02/08/2008, -0/+3Excellent illustration, LN.
- Kyan, on 02/08/2008, -3/+6Ron Paul freak, right?
- edebolt, on 02/08/2008, -0/+3you can spend on things like investments. Consumption is not just diapers and beer. You could buy a rental property, business, machinery for a craft, inventory for a small business, gardening supplies. Lots of things you could buy which would help your bottom line. What about spending on alternative energy. Its consumption but helps your bottom line.
- jerbaker, on 02/08/2008, -0/+3MBA stands for Masters of Business Administration. It doesn't make sense to say someone has a Masters of Business Administration in Economics. His Masters degree is in business administration, economics, or both.
- SpaceMonkeyZero, on 02/08/2008, -0/+3I plan on becoming a slum lord on Baltic and Mediterranean Avenues! The key is to get your customers right after payday!
- AxeSwinger, on 02/08/2008, -1/+4Sure but with food prices expected to increase anywhere from 5-10% it might be better to invest in food.
- Look4Truth, on 02/08/2008, -1/+4What an idiot. Maybe she should study the effects of a failing fiat currency on past nations before scoffing.
http://quotes.ino.com/chart/?s=NYBOT_DX&v=dmax
Now for the economically challenged who just nodded in agreement while reading that silly article, down is BAD on that chart...VERY BAD! - oOLiquidNightOo, on 02/08/2008, -0/+3epilogue:
for several days the villagers waited for the return of the man and his assistant. after the days turned to weeks some villagers were able to sell some of their monkeys to the other villagers for $5.00. when these villagers were no longer able to find interested buyers, they became angry and released their monkeys back into the wild.
some determined villagers kept their monkeys, built housing, feed and cared for them and vainly waited for the man's return. - darny, on 02/08/2008, -0/+3Simply dugg for underground command center
-
Show 51 - 100 of 143 discussions
Digg is coming to a city (and computer) near you! Check out all the details on our 
© Digg Inc. 2009
— Content created and posted by Digg users is