@freemo @admitsWrongIfProven

> If you have profit alone, then you just are moving money around

So then you would agree that most of the stock trading industry is not, by your definition, "generating wealth" despite the fact that they become fabulously wealthy by performing their jobs?

> yes the owners who risk everything and actually create the wealth are the people who should be wealthy.

The problem is that the guys who come in after the original owner sells are paid even more, usually just to ruin what the original owner built. Most businesses aren't owned by their founders, or even people who care about the long-term health of the business, but rather short-term investors who are only looking to cash out as soon as possible. That mindset of wealth extraction is what's wrong with so much of business today.

@freemo @admitsWrongIfProven

“Generating a lot of wealth in the short term, knowing the company will be destroyed int he long, still generates wealth”

Sure, it “still generates wealth”. Burning cash for heat generates wealth if you’re cold, but that doesn’t mean it’s a good thing. Why would you look only at wealth in a single point of time? A company that lasts 100 years generates far more wealth than a company that closes after one. By seeking short-term profits over long, the investors are robbing the company of future wealth to pay themselves dividends now. And they enshittify the products and services as a result of their wealth extraction techniques. We see it happening over and over.

Investment is a good thing for business. But publicly-traded companies aren’t invested into; They’re bet on like ponies in a race, and the incentives that come from that rob all of us in the long run.

@LouisIngenthron

Sure, it “still generates wealth”. Burning cash for heat generates wealth if you’re cold, but that doesn’t mean it’s a good thing.

This analogy suggests you still dont understand the distinction between money, value, and wealth.

Short of literally burning money, companies dont burn money when they tank, even if they spend irresponsibly they arent burning money… All they are doing is moving the money out of their company and into other companies or peoples pockets.. the total wealth when a company tanks is the same, its just distributed different.

Why would you look only at wealth in a single point of time?

We arent, we are explicitly talking about how wealth that was generated (thing with utility, the cars) then a company going bankrupt later does not destroy that wealth at a later point in time… the company crashing doesnt destroy wealth because the amount of things it put into the world that had utility (which was earlier in the timeline, so we are looking at time here) still exists, so wealth was generated and not destroyed.

A company that lasts 100 years generates far more wealth than a company that closes after one

This is certainly true.. and if your argument was “the company that made short term wealth and then crash did not reach its full potential at making wealth, and if it had been managed with concern for its long term success then it could have generated more wealth”… this would be a correct statement yes, there was a lost potential for generating wealth that wasnt realized… that is not the same as saying that the company didnt over the court of its life have a net positive wealth generation, it did.

By seeking short-term profits over long, the investors are robbing the company of future wealth to pay themselves dividends now.

Its not always for dividends, and investors do not get to dictate day to day operations.. The only thing an investor can do is vote for board members and with some serious restrictions sometimes impeach them.. even the board cant control day to day operatiosn, they in turn need to hire a CEO.

So to think an investor in a company even can exhivit such fine level of control is a bit sketchy…

But all that aside, sure, they are generating wealth, which is good for the world, but they are generating perhaps less than they potentially could… ok.. so its less good than it could be, but still good… im ok with that analysis i suppose.

And they enshittify the products and services as a result of their wealth extraction techniques. We see it happening over and over.

Sure, i am willing to say they may build a shittier product to maxamize profits.. thats partly the consumers fault for buying a product that is a shitty deal though.. but yea, I mean i dont care enough to disagree with this per se… does change the fact that they generated wealth which was good for society and if you eliminated them all you wont achieve some paradise, youll just destroy what little imperfect wealth generation we have and create massive poverty… so while maybe they could build better products in theory, in practice they are still adding wealth to the world.

Investment is a good thing for business. But publicly-traded companies aren’t invested into; They’re bet on like ponies in a race, and the incentives that come from that rob all of us in the long run.

Yea this shows you have absolutely no clue how stocks work then… I just spent 2 years running a company merging with a public company (so I had to run it like a public company ont he stock market)… Yes when you buy stock we as a public company get operating money as a result of that. You probably dont realize it but the company itself is able to 1) take out loans on the value of its stock 2) holds some of its own stock so as the value of stock rises so does the asset holdings of hte company 3) can, and does, and is normal issue new stocks and sells it on the stock market regularly

Literally public companies get cash as a result of their stock price going up, and your gonna sit here pretending like its just a trading card game…I know you mean well but man you assert things like you know when clearly you dont know the basics… when talking to experts on subjects (in this case me as someone who literally just spent 2 years being the EVP of a public company)… Please please please… try to listen to people and recognize the areas you dont have knowledge in (like i did with you when talking about aviation)… it will go a long way for you, I say this as a friend not to be mean.

@admitsWrongIfProven

@LouisIngenthron

Just to be clear despite my strong opposition to ideas on economy. I like and respect you as a person. So please dont take my harsh criticism personally in any way.

@admitsWrongIfProven

@freemo @admitsWrongIfProven I’m a little bit annoyed about your assumptions about what I know, but not at all about your argument. I enjoy the give and take as well.

@LouisIngenthron

It seemed you were saying by “not invested into” that companies didnt get the money from buying stocks or their stock price rising…

Seems that may not have been what you meant, so again, sorry if I assumed or misunderstoof what you meant to say.

@admitsWrongIfProven

@freemo @admitsWrongIfProven All those things you claim I don’t know about the stock market… I did. I even own stock and profited off of Elon’s jackass purchase.

I would never claim that the stock market generates no value. My argument is simply that it generates more harm, and is therefore a net negative on society.

@LouisIngenthron

Ok so we are in agreement that this statement you made is wrong?

But publicly-traded companies aren’t invested into

And that in fact public traded companies, when you buy their stock, causes them to be “invested into”… in other words we agree that buying stock raises stock prices and ultimately results in money int he pockets of the company you invest in?

As long as we agree there then yea, seems we got the basics in line, and I apologize if i misunderstood

@admitsWrongIfProven

@freemo @admitsWrongIfProven Fair enough, yeah, that was meant as hyperbole, not a statement of fact.

@LouisIngenthron

Fair enough then.. doesnt always translate well ont he internet…

As a general rule i try to give everyone the benefit of the doubt around miscommunications. No worries then.

@admitsWrongIfProven

@freemo @admitsWrongIfProven You must admit, though, that the motivations behind investing privately in businesses tend to be vastly different than the motivations behind buying stock, even though they are both technically investment. That was the point I (apparently, inelegantly, lol) was trying to make.

I buy stock to support companies I like, but I’m pretty sure I’m in the minority there.

@LouisIngenthron

You must admit, though, that the motivations behind investing privately in businesses tend to be vastly different than the motivations behind buying stock, even though they are both technically investment. That was the point I (apparently, inelegantly, lol) was trying to make.

Oh yes, the two types of investors thing very differently. But I think this has less to do with public vs private and more to do with who is allowed.

You cant legally invest in a private company unless you are an accredited investors… A person cant buy 1 share at 100$ off the street.. they need to prove they qualify as an investor (there are a bunch of rules but more or less they have to be rich and have experience in investing).

So yea obviously when the private investors are limited to professional investors who are mostly all rich and invest exclusively for a living you will have a much different dynamic then in the public where every 80 year old babushka (grandmother) is out there spending 20 cents on a share of google.

@admitsWrongIfProven

@freemo @admitsWrongIfProven Wait, what? I don’t think that’s right. If I want to sell 10% of my company to my friend because he wants to support me with a cash infusion, neither of us need a license for that, do we?

@LouisIngenthron

It is complicated, and im not a lawyer… so i cant go into the level of detail you’d like…

But the short of it… it depends. If your friend is just a friend with no business expiernce or money, then no, that would be illegal.

There would be three ways:

1) They have to qualify as credited (basically a rich experienced investor)

2) They would have to qualify as exempt from accreditation requirement by being what is legally defined as a “sophisticated investor”… more or less this means they have to be an expert enough in the field to be able to show they fully understood the risks and rewards. Basically if your aunt who is super sweet but has never worked int he industry wants to invest she wont qualify.

3) the investment needs to be registered… which basically means all the restrictions of a public company are enforced on it.. this is completely not a possiblity for any startup as the infrastructure to qualify the investment as registered is very very expensive (its about as expensive as just going public since you have to make all the same motions).

@admitsWrongIfProven

@LouisIngenthron

Also accredidation, despite the confusing name, is not a license. There is no agency that gives it to you.. its simply a set of minimum criteria a person must meet and prove to you they meet before investing. There are a few criteria.. but for example anyone with a net worth of 1 million or more is automatically an accredited investor

@admitsWrongIfProven

@freemo @admitsWrongIfProven That’s so fucked up.

@LouisIngenthron

It was intended to protect people.. Its the same logic that you cant give investment advice to someone if you yourself arent licensed..

But in reality i agree its fucked up because it severely limits the freedom of people to invest and take on the risks if they should choose to do so.

@admitsWrongIfProven

@LouisIngenthron

for what its worth you CAN however give your aunt who doesnt know the business shares for free… like they can hold shares, they just cant buy shares from you.

This is why you can bring on a partner and give them a cut no matter who they are, so long as they dont have to pay to come on board as a partner (unless they match the other criteria).

@admitsWrongIfProven

@freemo @admitsWrongIfProven So, based on a cursory search, it seems 230.504 makes allowances for securities sold for less than 10 mil a year, and 230.506 has a carve-out for securities that are not advertised publicly and have fewer than 35 buyers… that one says that all you need is basically a letter from the buyer saying they’re informed enough to buy.

@LouisIngenthron

And thus why you’d need a lawyer to hash out the details :)

I cant speak to how complete your understanding is… I do know like anything it can get complicated and there are edge cases… If this is an actual issue for you please talk to a lawyer not me. I know enough to know when I need to talk to a lawyer, but even I after years of doing this still wont try to fully understand the law myself.

If you took the money and didnt consult with a lawyer you may get in a lot of trouble later.

@admitsWrongIfProven

@freemo @admitsWrongIfProven Agreed. But, no, I’m not looking to sell my company anytime soon.

Whatever happened to the term “sell-out” being an insult? When did that stop?

@LouisIngenthron

I just asked my buddy who knows the law better than me (still not legal advice but closer to it than my advice)..

He said rule 504 must still be registered, so it is still prohibitive for most people, thought he sophisticated investor rule would exempt from registration as i mentioned earlier.

Rule 506 is the sophisticated investor rule, 20 while it does, as you say, give you access to sell to up to 35 non-accredited investors they must all qualify as sophisticated.

So seems, at least according to my friends, neither of these rules actually change what I said, they pretty much reinforce what i said but just add some more details…

@admitsWrongIfProven

@LouisIngenthron

A company that lasts 100 years generates far more wealth than a company that closes after one

One small point about this… One company lasting 100 years will generate more wealth… But a company succeding and then failing over a 10 year period, but generates wealth over the ahort term puts more wealth into the world. So when it crashes that wealth has to move into some other place, a new company. So rolling that money into a new company that then generates wealth for 10 years, and repeat… may very well generate the same or even more wealth.

Generating wealth 10x with 10 seperate companies over 100 years, rather than one company generates the same wealth regardless.. The key is in understanding that a company crashing doesnt destroy wealth, so the fact that there is a “rebirth” cycle that bank rolls the society wealth every time means the overall picture is still wealth generation over the long term.

@admitsWrongIfProven

@freemo @admitsWrongIfProven If the companies were dying naturally, then I would agree with you. At some point, the stodgy Goliath must be beaten by the nimble and innovative David.

But they’re not dying naturally, or being beaten in open competition. They’re being sucked dry by vampires who claim an ownership percentage.

At this point, I legitimately treat an IPO as a death knell.

@LouisIngenthron

I mean for what its worth after spending 2 years dealing with running a more or less public company… on this we agree… I took over after we as a company were already commited to go public… I said when I joined to the day I left our decision to go public was the dumbest shit ever and the type of investor we had to deal with was far less desirable than a private investor…

So yea, in this regard we sort of agree.. i wouldnt be quite as bad as you in terms of how anti-public I am (like ill invest in public companies a bit but i would never take my own public company)… but we do agree public invesment is a lot shittier a deal than private

@admitsWrongIfProven

@freemo @LouisIngenthron @admitsWrongIfProven A fully legalized drug trade would generate wealth and improve the standard of living, even for those with problems.

When compared to Smart Device manufacturers and their corruption of government. A legal drug trade is morally superior.

@AmpBenzScientist

A drug trade doesnt create wealth usually.. I mean if i sell heroin, heroin itself doesnt really have utility (as it only harms people)... and ultimately leads people to behave in ways that are wealth destroying... so no... that wouldnt generate wealth, it would be one of the main examples of destroying wealth.

@LouisIngenthron @admitsWrongIfProven

@freemo @LouisIngenthron @admitsWrongIfProven You would be creating wealth, job security, infrastructure and capital to reinvest in the community. I don't see the problem with people dying as those people are removed from the community and can no longer be role models. The problem is government funding shadow wars with the proceeds and ruining lives with a system they set up.

It reminds me of a song.
https://youtube.com/watch?v=pDuBkUzNaUk