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Yup, they would be quite surprised after they destroy the biggest wealth producers in society and trigger massive starvation and death for everyone... good intentions dont get you very far, least of all when you do the exact opposite of whats best for society.
That isnt to say that there arent issues to address with the rich, there are, but if your going to eliminate rich people all together, you might as well just cover yourself in honey and go hug a bear, your chance of coming out of it with something positive to show would be much higher.
@freemo @admitsWrongIfProven Some of us prefer businesses that produce actual value, like cheeseburgers or houses, instead of just "wealth".
The people who actually create those things should be the wealthy in a just society, not the people who were born to it.
Cheese burgers and houses **are** wealth... Based on your wording you are confusing "wealth" (things that have utility and value) and money..
If you have profit alone, then you just are moving money around.. you arent generating wealth (or money)... in order to generate wealth you must increase the overall number of things in society with utility... So yes what i said already was in line with what your saying, you just are using wealth in the way of "collecting wealth" which is not the same as "generating wealth".
> The people who actually create those things should be the wealthy in a just society, not the people who were born to it.
Agreed, like the people who sacraficed decades to create the idea, get funding, investing in the building, getting the money to pay people to do the labour, etc... yes the owners who risk everything and actually create the wealth are the people who should be wealthy.
> 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.
@undefined @admitsWrongIfProven @LouisIngenthron
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?
Its a bit more complex than that… Stocks directly allow a company to aquire funding from the public.. If the company is a company that generates wealth (not all companies necceseraly do), and you buying their stock enabled them to have the liquid capital needed to invest in a project that accelerated their growth, and thus their ability to generate wealth… then no, you as an investor in their stock on the market directly helped wealth get generated as a result of your investment.
If you invest in companies that are all vapour ware and dont actually generate wealth themselves, then no you arent generating wealth, even if you get rich doing it…
As with most things, it depends ont he nuance and any pure ideological standpoint is just nonsense.
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
As with everything it is situational.. if a new owner comes in and tanks the company (or changes it froma wealth generator to non-wealth generator regardless of value)… then yea your right, they are destroying wealth not creating it… However if they enable the company to create more things which add utility to the world, tehn they may be continuing to generate new wealth… again it depends. It is situational
Most businesses aren’t owned by their founders, or even people who care about the long-term health of the business,
Being owned by the founders is completely irrelevant to if they are a wealth-generator.. even caring about the long-term heath is irrelevant to if they are wealth generators now or int he near future.. you can make choices which ensure your company is a wealth generator for 5 years to come but your plan is flawed and then by 10 years it may fail. This failure does not necceseeraly destroy its wealth previously generated thoughm but it may, it depends.
but rather short-term investors who are only looking to cash out as soon as possible.
Generating a lot of wealth in the short term, knowing the company will be destroyed int he long, still generates wealth, so long as its destruction doesnt destroy the previous utility it created.
A car company that sells cars and makes a profit for a year, then tanks, still generated wealth for a year, then stopped, even if the companies value goes to 0 the amount of utility added to the world is the same (those cars still exist) and thus overall still generated wealth.
“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.
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.
@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.
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
@freemo @admitsWrongIfProven Fair enough, yeah, that was meant as hyperbole, not a statement of fact.
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.
@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.
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.
@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?
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).
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
@freemo @admitsWrongIfProven That’s so fucked up.
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).
@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.
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.
@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?
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…
We are talking as i write this by the way.
I asked about the whole”A sophisticated investor just needs a letter” thing you said.. and he said, its more complicated than that.
It is not your job as an investor to prove they are sophisticated, but if you know they arent it would work against you.
So if you know your aunt well enough and know she never worked in the industry, never invested, and didnt even graduate high school… then even if she lies in a letter and says she is an expert, because you know she isnt you can and probably will be found guilty should that ever go to court.
However if there is plasuable deniablity and the court would find that you had every reason to beleive they were a sophisticated investor and they just lied to you but you had no idea they were lying… then yea, you probably would be fine.
As he put it, you basically just need to show that any “reasonable person” in your situation would conclude the person was a sophisticated investor.
@freemo @admitsWrongIfProven So, say you know this person has worked in offices all their life, helping to facilitate day-to-day business. They’re college educated, but not necessarily in business or investing. They’ve never invested before, but they hear out the business plan and have faith in the person they’re investing in to succeed, and they want to support them.
Edge case?
@LouisIngenthron Neither me nor my friend would be comfortable saying with any authority… thats just enough detail to need a lawyer to get any meaningful answer..
From what me and my friend are kinda agreeing on (and keep in mind its speculation) is that it depends but i dont think it would count.
Education itslef or any one factor doesnt matter. Courts look at “the totality of the circumstances” as my friend just put it. Basically what this means is you can be a high school dropout, but if you demonstrated you are an expert in other ways, thats fine. But if you have a deggree in business that too may qualify you if everything lines up.
Based on everything im hearing (and my friend agrees).. if, for example, someone works as a secretary in a doctors office, that wouldnt, for example, qualify them to invest in a medical company..
@freemo So, that makes sense; especially if its purpose is to prevent people from getting duped by bad actors. If that’s the case, then, wouldn’t there also typically be a degree of leniency granted if both parties were acting in good faith? I did see some stuff in that law about bad actors, but that was more “actors with a record”.
@freemo I’m also surprised there’s not a “mom” exception, lol.
@LouisIngenthron Yea to be honest I would have expected some exemptions for immediate family.. if there are any neither I nor my friend know about it.
Keep in mind these are just the federal restrictions… state by state restrictions can be even worse.
@LouisIngenthron Comes back to “the totality of the circumstances”… I think its reasonable to say that the sentancing would be harsher if the evidence shows you were intentionally trying to defraud them… for sure. I mean again non-lawyer, but that tracks with what I know and am learning.
@freemo Then presumably, “ignorance of the law” could likewise work in someone’s favor.
@LouisIngenthron Well I doubt that.. ignorance of the law is never an excuse… its not the ignorance of the law working in your favor, it is your good vs bad intent… intent is a big part of the law, ignorance of the law doesnt factor in too much, at least not directly.
@freemo Well, but they’re connected. If you’re ignorant of the law, then you’re not inherently intending to break it.
@LouisIngenthron I have never heard of intentionally breaking a law vs accidentally breaking a law making a difference… i guess in sentancing maybe.. i dunno, youd have to ask someone who knows more than me, but I dont think so…. In terms of guilt/innocent im pretty certain it wouldnt matter though… but sentancing i dunno..
I guess you can think of murder right… if you intentionally kill someone its murder, if you accidentally but negligently kill someone its man slaughter… your knowledge of the law wont effect your verdict at all… but your intent to murder will effect it.. its just, it doesnt matter if you know murder is illegal or not.
So to bring that back here… getting her to invest that exploits her may not be intentional.. but whether you know exploiting her is illegal or not really wont effect it, what matters is did you intend to exploit her or not.
@LouisIngenthron Yes but it doesnt matter if you intend to break the law, it matters if you intend to do thing X… thing X is a thing that breaks the law… but your knwoledge of it being illegal isnt the factor, your intent to do it is.
Intending to murder someone is more illegal than accidentally murdering someone. knowing murder is illegal has no effect there that dichotomy is true regardless.
@freemo Right, I don’t think ignorance of the law would help you if you acted in bad faith. But I think it might if you acted in good faith, like a little bonus.
@LouisIngenthron I think its possible a judge might decide to be less harsh in his punishment of you… I think it would be a bit of a crap shoot and just depends on the judge you get maybe and what impression it makes on him… and i only think it is likely to have much of an effect, if any, in sentencing.
But hey, what the fuck do I know.
@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