XB-70 a prototype for Mach 3 SST?
Willie...@gmail.com
Due to the advanced design of the GE YJ-93 engines - the XB-70 is
faster and carries more payload, has more interior volume, has greater
range - with about the same fuel per payload mile!
The XB-70 was not designed for supercruise. The afterburners however
were designed to be very very efficient at Mach 3 (2,000 mph) through
an innovative inlet design. This could be repeated or improved with
modern design and materials.
So, its reasonable for an aerospace engineer, or someone who took a
few aerospace engineering courses on the subject to ask, could a
modified updated version of the XB-70 be built to replace the Concorde
at a cost that is affordable?
I think so.
The aircraft could fly the same corridors across the ocean as the
Concorde, and fly the 3,170 miles from London to New york at 2,000 mph
in 1 hour and 35 minutes at an altitude of 75,000 feet.
With 125 passengers each paying $15,000 a total revenue of $1.87
million per flight would be generated assuming 100% loading each
flight.
Fuel cost - 120 metric tons x $725 per metric ton - $87,000
Not such a large part of the ticket price!
Flight cycles/life cycle - 9,300
Maintenance cost: $100,000/flight
Consumables/passenger services: $125,000/flight
Cash flow per flight $1.558 million per flight
Vehicle life cycle revenue @ 100% - $14.49 billion/vehicle
A fleet of four vehicles providing twice daily service between London
and New York would perform 730 flights per year and generate $1.137
billion per year in free cash flow. This is a longevity of the fleet
of 51 years.
Assuming half of this revenue stream supports debt at a discount of 8%
per annum over this period, and 1/4 for spare parts and support
infrastructure, and 1/4 for insurance and taxes - then the fleet of
four vehicles have a present value of $13.91 billion.
The question then is, could four XB-70C (for commercial variants)
using the GE YJ-93 (with updates) and modern materials and structures,
be built, along with all support and maintenance infrastructure, for
less than $13.91 billion?
If so, a group of investors may be found to support the costs, and
then refinance this cost at system start-up, to realize immediate
profit when the system began flying.
That is, say Lockheed or Boeing would come aboard and guarantee
production of the four aircraft (with a spare fifth aircraft for test,
training and backup) for say $10 billion in say 3 years. So,
investors would put up the $10 billion, and then go to the banks for
say $14 billion (which is half the value of the cash flow) and pocket
the $4 billion in 3 years.
Not VC rates of return, but something that might be worth doing.
Especially if there were a population of early adopters with the means
to support such an investment.
There were 1,000 people who were frequent fliears on the Concorde.
Those who used it one or more times per month over its life. Thos
folks spent well over $10 million each on the aircraft. Those folks
would be the early adopters who might be persuaded to pay $10 million
each to fund a Super-Concorde - and who would then enjoy a discounted
price, as well as a 40% return on investment in 3 years. As well as
playing a part to restore something wonderful in human history, and
take the next feeble step forward in commercial flight.
And also, in the modern age, to wrest control, just slightly away from
the statist who would tell us all what to do and how to live.
William Mook
http://en.wikipedia.org/wiki/Concorde
http://en.wikipedia.org/wiki/XB-70
CONCORDE General characteristics
Crew: 9
Capacity: 92-120 passengers (128 in high-density Layout[63])
Length: 202 ft 4 in[64] (61.66 m)
Wingspan: 84 ft 0 in (25.6 m)
Height: 40 ft 0 in (12.2 m)
Fuselage internal length: 129 ft 0 in (39.32 m)
Fuselage max external width: 9 ft 5 in (2.88 m)
Fuselage max internal width: 8 ft 7 in (2.63 m)
Fuselage max external height: 10 ft 10 in (3.32 m)
Fuselage max internal height: 6 ft 5 in (1.96 m)
Wing area: 3,856 ft² (358.25 m² )
Lift/drag ratio: Low speed- 3.94, Approach- 4.35, 250 knots, 10,000
ft- 9.27, Mach 0.94- 11.47, Mach 2.04- 7.14
Maximum fuel load: 210,940 lb (95,680 kg)
Maximum taxiing weight: 412,000 lb (186,880 kg)
Empty weight: 173,500 lb (78,700 kg)
Useful load: 245,000 lb (111,130 kg)
Powerplant: 4× Rolls-Royce/SNECMA Olympus 593 Mk 610 afterburning
turbojets
Dry thrust: 32,000 lbf dry (140 kN) each
Thrust with afterburner: 38,050 lbf (169 kN) each
Performance
Maximum speed: Mach 2.2[65] (2,164 km/h)
Range: 3,900 nm (4,500 mi, 7,250 km)
Service ceiling: 60,000 ft (18,300 m)
Rate of climb: 1,525 m (5,000 ft) /min (25,41 m/s)
Wing loading: lb/ft² (kg/m²)
Thrust/weight: .373
Fuel consumption for max. range (max. fuel/max. range): 46.85 lb/mi
(13.2 kg/km)
Maximum nose tip temperature: 260 °F (127 °C)
[edit] Specifications (XB-70A)
Data from XB-70 Fact sheet[1]
General characteristics
Crew: 2
Length: 185 ft 10 in (56.6 m)
Wingspan: 105 ft 0 in (32 m)
Height: 30 ft 9 in (9.4 m)
Wing area: 6,296 ft² (585 m²)
Airfoil: Hexagonal; 0.30 Hex modified root, 0.70 Hex modified tip
Empty weight: 210,000 lb (93,000 kg)
Loaded weight: 534,700 lb (242,500 kg)
Max takeoff weight: 550,000 lb (250,000 kg)
Powerplant: 6× General Electric YJ93-GE-3 turbojet, 28,000 lbf
(133 kN) each
Performance
Maximum speed: Mach 3.1 (2,056 mph, 3,309 km/h)
Cruise speed: Mach 3.0 (2,000 mph, 3,219 km/h)
Range: 4,288 mi (7,900 km) combat
Service ceiling: 77,350 ft (23,600 m)
Rate of climb: ft/min (m/s)
Wing loading: 84.93 lb/ft² (414.7 kg/m²)
Thrust/weight: 0.314
me
[snip].
> So, its reasonable for an aerospace engineer, or someone who took a
> few aerospace engineering courses on the subject to ask, could a
> modified updated version of the XB-70 be built to replace the Concorde
> at a cost that is affordable?
>
> I think so.
Now, would it be "competitive"? Your basic analysis may be
valid, but the reality of the market place is that anyone who could
cobble together that kind of cash, could make a whole lot more
money doing alot of other things with it.
Boeing looked at some sort of high efficiency transonic
aircraft (Sonic cruiser?) and apparently couldn't find sufficient
market for it. My tendency is to believe that they knew what they
were talking about.
Mxsmanic
> Boeing looked at some sort of high efficiency transonic
> aircraft (Sonic cruiser?) and apparently couldn't find sufficient
> market for it. My tendency is to believe that they knew what they
> were talking about.
I think that for the majority of passengers on the majority of routes, current
speeds are "fast enough," in relation to the price point. Higher speed would
come at a higher cost, and most travelers don't want the higher speed badly
enough to pay the higher cost. Indeed, the market seems to indicate that
people want the lowest possible cost, and are willing to sacrifice a great
deal to get it.
Modern airline flights are slower than their predecessors, thanks to more
traffic in the air and operating procedures that favor fuel economy over
speed. The fastest airliners are also the oldest (e.g., the 747). Nobody
seems to be complaining.
Boeing has a pretty good feel for the market. Their 787 looks like it's just
about what the airlines want right now. And if airlines want speed or
capacity a decade or two from now, Boeing will give them that instead. It has
adapted in the past, it will continue to adapt in the future.
Not so Airbus, alas!
me
> me writes:
> > Boeing looked at some sort of high efficiency transonic
> > aircraft (Sonic cruiser?) and apparently couldn't find sufficient
> > market for it. My tendency is to believe that they knew what they
> > were talking about.
>
> I think that for the majority of passengers on the majority of routes, current
> speeds are "fast enough," in relation to the price point. Higher speed would
> come at a higher cost, and most travelers don't want the higher speed badly
> enough to pay the higher cost. Indeed, the market seems to indicate that
> people want the lowest possible cost, and are willing to sacrifice a great
> deal to get it.
>
> Modern airline flights are slower than their predecessors, thanks to more
> traffic in the air and operating procedures that favor fuel economy over
> speed. The fastest airliners are also the oldest (e.g., the 747). Nobody
> seems to be complaining.
>
True, but a tad stilted because the majority of routes wouldn't be
a consideration at all for supersonic flights. Take the routes served
basically only by 777, 767, and 747 as well as the Airbus equivalents
and although it might not be the "majority" there are some long
flights
which could be a candidate for such an aircraft. Problem really is
I suspect that there aren't enough of them to justify the development
of the aircraft.
But I do know that people resist trips once the time required goes
beyond about 10 hours. Being able to cut these times down,
and on even shorter routes being able to make multiple trips in
a day would seem like a useful capablity. It's just the same old
thing about there being enough of a market to justify developing
the plane. These things are expensive to engineer and produce
and take the better part of a decade or two to realize any
net profit.
Willie...@gmail.com
>
> - Show quoted text -
No one doubts Boeing's ability to make efficient choices. But, what
is good for Boeing as a company is not always the best for niche
markets. All you say about aviation generally is true. But do not
apply to a niche market such as the one that exists between NYC and
London.
The air routes are there and approved.
So, while Boeing may have better uses for $10 billion than to build 5
mach 3 SSTs, a specialty company may contract with Boeing and make the
kind of returns mentioned in this niche market case. The niche market
players would also be well situated should there be a change in the
fundamental cost of energy in society due to a break through in
nuclear powered chemosynthesis or low-cost solar power and so forth.
So, while your points remain valid in general, they do not undermine
the possibility that a specialty transport company could make money
(and history) serving this niche markets, and perhaps others (such as
LA - Tokyo)
The LA - Tokyo run woud be 5,478 miles. The modified XB-70 would
carry about 80 passengers this distance. An advanced version might do
better. At 2,000 mph this flight would take 2 hours and 45 minutes.
This trip might cost $23,500 - and again four vehicles would provide a
twice daily flight between cities - and they would generate about
$1.15 billion per year in free cash flow.
With a production run of a dozen aircraft - which includes two spares
and ten flight articles - a budget of $1.5 billion each could easily
be supported. , this is an $18 billion program. It should take no
more than 3 years to complete if it made use of well proven
technologies approaches and powerplants. It should also have a $28
billion payoff once operational.
And this program could make use of facilities and capacities that
might have utility in future vehicle development, commercial, civil
and military. Thus, this private and civil program could spread costs
from military programs and reduce their costs,or alternatively,
provide more 'bang' for the buck spent on military programs that make
use of comparable skill sets. NASA could have a mach 3 test platform,
the military could have a mach 3 bomber, freighter, recon, command and
control platform. haha.. I could imagine that the President of the
US might want a version of Air Force One - that flew 4,800 to 6,000
miles at Mach 3 at an altitude of 75,000 to 85,000 feet in 2.4 to 3.0
hours. And who knows how many Mach 3 bizjets one could sell at a
$2,200 million price point? to heads of state or heads of large
corporations. With one refueling stop a person could be on the
opposite side of the Earth in 6 hours by burning 250 metric tons of
jet fuel at a cost of $190,000 - less than half the cost of filling up
a Laursen 200 ft yacht to travel the same distance..
So, while this program is a bit more risky and a bit less rewarding
than Boeing has available to it, it is still a feasible program for
private sector risk takers who would like to see a handful of vehicles
of this capacity ply the airways.
One can imagine that those 1,000 to 10,000 folks that were heavy users
of the Concorde, those that spent more than $5,000,000 on tickets over
the aircraft's life - those folks might be identified, and offerred a
pre-purchase program for tickets, redeemable in 3 or 4 years - to
start the program. And once successful in the PROVEN market between
NYC and London, then expand it to Tokyo and LA.
Despite your quite accurate commentary that indicates this aircraaft
is not well ssuited to serve the mainstream market, and that the likes
of Boeing have better use for their money, the case for a niche market
is easily made and not affected by any of your observations.
.
Mxsmanic
> True, but a tad stilted because the majority of routes wouldn't be
> a consideration at all for supersonic flights.
That would depend on the aircraft, although it's true that everything up to
now has been impractical for anything other than long-haul flights.
> Take the routes served
> basically only by 777, 767, and 747 as well as the Airbus equivalents
> and although it might not be the "majority" there are some long
> flights
> which could be a candidate for such an aircraft. Problem really is
> I suspect that there aren't enough of them to justify the development
> of the aircraft.
It's all about money, and right now the money is in lots of little, slow
flights in medium-size aircraft.
Unfortunately, this is overcrowding the air traffic system, and is wasting
huge amounts of fuel, and is producing massive amounts of pollution. But
those are separate issues. It's clear that speed is not a high priority,
though, as long as it's "fast enough" (and aircraft are considerably faster
than anything else for trips of 1000 km or more).
> These things are expensive to engineer and produce
> and take the better part of a decade or two to realize any
> net profit.
So did the A380, which is probably why it will be a white elephant.
Bob Myers
<Willie...@gmail.com> wrote in message
news:1188506216.2...@l22g2000prc.googlegroups.com...
> So, while your points remain valid in general, they do not undermine
> the possibility that a specialty transport company could make money
> (and history) serving this niche markets, and perhaps others (such as
> LA - Tokyo)
Could be, but the HUGE fly in that ointment is that it takes someone
like a Boeing or an Airbus to be able to afford the development of
an aircraft that would be used in such a niche. And unless they can
be reasonably assured of a satisfactory return on those investment
dollars, it will not happen.
Bob M.
me
> me writes:
> > True, but a tad stilted because the majority of routes wouldn't be
> > a consideration at all for supersonic flights.
>
> That would depend on the aircraft, although it's true that everything up to
> now has been impractical for anything other than long-haul flights.
Well, presuming something like the current air traffic control
system,
2 - 3 hour flights wouldn't be good candidates since most of it would
consist of subsonic "entrance and exit" phases. Even longer 5 hour
flights, although faster, would consist of very short super sonic
speeds.
> > Take the routes served
> > basically only by 777, 767, and 747 as well as the Airbus equivalents
> > and although it might not be the "majority" there are some long
> > flights
> > which could be a candidate for such an aircraft. Problem really is
> > I suspect that there aren't enough of them to justify the development
> > of the aircraft.
>
> It's all about money, and right now the money is in lots of little, slow
> flights in medium-size aircraft.
Well, the core issue being "lot of... aircraft". Boeing, et al make
money by selling alot of planes. They didn't make the A380 type
plane because they didn't think they'd make enough of them.
> Unfortunately, this is overcrowding the air traffic system, and is wasting
> huge amounts of fuel, and is producing massive amounts of pollution. But
> those are separate issues. It's clear that speed is not a high priority,
> though, as long as it's "fast enough" (and aircraft are considerably faster
> than anything else for trips of 1000 km or more).
However, currently folks are avoiding extremely long journeys, and
aircraft are limited in their total flights per day because of their
speed.
If there is a market, it is in there that the aircraft has a
potential.
> > These things are expensive to engineer and produce
> > and take the better part of a decade or two to realize any
> > net profit.
>
> So did the A380, which is probably why it will be a white elephant.
The reason Airbus could, and Boeing didn't was because of the
way the Airbus could finance it and Boeing couldn't.
me
[snip]
> No one doubts Boeing's ability to make efficient choices. But, what
> is good for Boeing as a company is not always the best for niche
> markets. All you say about aviation generally is true. But do not
> apply to a niche market such as the one that exists between NYC and
> London.
>
> The air routes are there and approved.
>
> So, while Boeing may have better uses for $10 billion than to build 5
> mach 3 SSTs, a specialty company may contract with Boeing and make the
> kind of returns mentioned in this niche market case. The niche market
> players would also be well situated should there be a change in the
> fundamental cost of energy in society due to a break through in
> nuclear powered chemosynthesis or low-cost solar power and so forth.
However, anyone who could raise that kind of capital to develope
such
an aircraft, could make vastly larger sums investing in other markets/
products.
Greed is a powerful incentive.
> So, while your points remain valid in general, they do not undermine
> the possibility that a specialty transport company could make money
> (and history) serving this niche markets, and perhaps others (such as
> LA - Tokyo)
[snip]
Or make vastly more money doing something else.
Willie...@gmail.com
> <Willie.Moo...@gmail.com> wrote in message
I think you've got it wrong when you say Boeing and Airbus can afford
to develop their own planes. They don't! haha.. Aerospace is not
the most profitable business to be in, and Boeing comes up dead last
in Yahoo's Aerospace Group when you look at Price Performance..
Leaders in Price Performance (Intraday)
VECTR SYSTEMS, INC. [vect.ob] +12.90%
RAYTHEON CO (NEW) [rtn] +1.18%
Laggards in Price Performance (Intraday)
SEQUA CP CL A [sqa-a] -1.29%
BOEING CO [ba] -0.05%
In fact, companies that can afford to develop innovative approaches to
their market place, or to niches in their markets, and not have to bet
their own company, can afford to take risks and reap the rewards.
So like I said, the facts say just th eopposite. Boeing along with
Airbus,is stuck with what they can afford, and the rather low risks of
betting their company on any changes they can make, rather than
pushing the envelope with tons of cash. Because they don't have tons
of cash...
Market Cap (intraday)6: 75.90B
Enterprise Value (30-Aug-07)3: 76.97B
Trailing P/E (ttm, intraday): 20.82
Forward P/E (fye 31-Dec-08) 1: 15.57
PEG Ratio (5 yr expected): 1.30
Price/Sales (ttm): 1.17
Price/Book (mrq): 12.99
Enterprise Value/Revenue (ttm)3: 1.19
Enterprise Value/EBITDA (ttm)3: 10.612
FINANCIAL HIGHLIGHTS
Fiscal Year
Fiscal Year Ends: 31-Dec
Most Recent Quarter (mrq): 30-Jun-07
Profitability
Profit Margin (ttm): 5.58%
Operating Margin (ttm): 7.68%
Management Effectiveness
Return on Assets (ttm): 6.20%
Return on Equity (ttm): 44.32%
Income Statement
Revenue (ttm): 64.67B
Revenue Per Share (ttm): 84.286
Qtrly Revenue Growth (yoy): 13.60%
Gross Profit (ttm): 11.09B
EBITDA (ttm): 7.25B
Net Income Avl to Common (ttm): 3.60B
Diluted EPS (ttm): 4.65
Qtrly Earnings Growth (yoy): N/A
Balance Sheet
Total Cash (mrq): 7.63B
Total Cash Per Share (mrq): 9.737
Total Debt (mrq): 8.65B
Total Debt/Equity (mrq): 1.478
Current Ratio (mrq): 0.847
Book Value Per Share (mrq): 7.46
Cash Flow Statement
Operating Cash Flow (ttm): 7.36B
Levered Free Cash Flow (ttm): 954.63M
This creates opportunities for people who DO have moneyf if they took
an interest in such things.
And that's why I'm saying that the folks who would pay $15,000 to
$25,000 for a Mach 3 flight from NYC to London on a monthly basis or
more, or LA to Tokyo ditto - those folks altogether have scads more
free cash flow than Boeing.
Check it out, free cash flow, that is the flow of cash available for
investing - is less than $1 billion a year. The rest is use for
operations. So,you'd have to bet the company to leverage that for 20
years to borrow the money needed to develop anything over $3 billion
--
On the other hand, the 4,000 people who spend $30,000 per month to
make day trips across the ocean - have a total of free cash flow of
$1.44 billion - just for the savings in air fares they're not buying
on the Concorde these days!! Just by escrowing that for 15 years to
arrange borrowings of $18 billion or so - they could build a fleet of
Mach 3 planes and deploy them. Once deployed, they could then arrange
financing against the sales of tickets as described,and enjoy a 12%
compounded annual return on their money.
This is twice the return they'd get if they invested in Boeing
directly
The reason Boeing doesn't do this sort of thing is because it cannot
afford to bet the company on long shots. It could however, use its
reputation to promote visionary concepts, like a Mach 3 cruiser based
on a slightly advanced XB70 - to people who DO have money and CAN take
risks - Boeing could do the work.
There is $32 trillion held by 9.5 million people in the world.
http://www.us.capgemini.com/worldwealthreport07/
56 folks in the Middle East control $3 trillion cash and are looking
for investments. They meet regularly in UAE. This is one of the
sources of the massive changes that are taking place in the 90 mile
strip of desert between Abu Dhabi and Dubai. The interest on $3
trillion cash is $150 billion per year. If these folks were given the
opportunity to make 12% compunded annual return on their investment by
folks like Boeing, I think Boeing would find the cash they need.
This is the project financing model of getting things done, rather
than a venture capital model, or traditional equity model. All that's
needed is some reasonable plan and some reasonable expectation of
return - and a business structure that makes sense. And there are
people out there with money.
The energy companies do this. That's why you can buy BP Alaska
pipeline stock, or BP Nigerian oil field stock, or BP North Sea
stock. They arrange their operations to become participants in
various projects around the world, and that way diversify away the
risk, and keep their skill sets fully utilized and profitable.
This is a good way to reduce costs of military programs if the same
skill sets are needed, and a way to keep money that otherwise might
find its way into competing projects in the US.
So, the fact is, Boeing doesn't have $18 billion to spend on a dozen
Mach 3 super-concordes. It can leverage its free cash flow to borrow
part of this, and start down this path. But in doing so, its betting
its future on this. And if there are any hiccups, the project is
dropped like a hot potato.
It makes more sense to arrange Beoing as a partner in a project, that
provides the technical skill sets - just as BP provides the skill sets
to develop an oil field. And then find investors who have a special
interest in this project, and create a project financing that allows
them to earn a reasonably high return. The idea that they are giving
birth to something brand-new, and something historic - is a plus.
Again, Boeing doesn't have the money. Neither does Airbus. They are
beholden to their respective governments. And they are not familiar
with project financing models. So, they don't now how to tap into the
literally TRILLIONS of dollars of spare cash that the world is awash
in - looking for ANYTHING that provides more than 3% to 5% return.
Willie...@gmail.com
> On Aug 30, 4:36 pm, Willie.Moo...@gmail.com wrote:
> [snip]
>
> > No one doubts Boeing's ability to make efficient choices. But, what
> > is good for Boeing as a company is not always the best for niche
> > markets. All you say about aviation generally is true. But do not
> > apply to a niche market such as the one that exists between NYC and
> > London.
>
> > The air routes are there and approved.
>
> > So, while Boeing may have better uses for $10 billion than to build 5
> > mach 3 SSTs, a specialty company may contract with Boeing and make the
> > kind of returns mentioned in this niche market case. The niche market
> > players would also be well situated should there be a change in the
> > fundamental cost of energy in society due to a break through in
> > nuclear powered chemosynthesis or low-cost solar power and so forth.
>
> However, anyone who could raise that kind of capital to develope
> such
> an aircraft, could make vastly larger sums investing in other markets/
> products.
Really? You're the guy who said that Boeing doesn't invest in Mach 3
cruisers because it finds investing in 747s more profitable. Fact is,
Boeing earns less than 6% on equity while the project I outlined above
earns 12%. Boeing doesn't have $18 billion and if it could arrange
financing for $18 billion it would be sinking the company. So, by all
rational measures, Boeing cannot reaonsably be expected to take the
risk for this project alone. But it reasonably could arrange this as
a private project and seek financing throgh a project financing model.
> Greed is a powerful incentive.
It ismy experience that people who have more than $1 billion cash
available have a hard time earning more than 3% after taxes with it.
They invest in companies like Boeing, and Walmart, but those folks
have a hard time earning more than 6%. That's why people with over $1
billion to invest seek special projects that might earn 12% or more.
This is how off-shore drilling platforms get built for $7 billion for
example. There's no reason that a fleet of Mach 3 super-concordes
couldn't get built the same way.
Venture Capital Funds rarely make more than 15% - even though the
'winners' eearn 45% or more per year. But these are special cases.
They are the 1 out of 3 new businesses that make it, and as a new
business, their ability to absorb more than $5 million to $25 million
is severely limited. Its their small size that lead to their massive
growth. Its very hard to find BIG situations that provide BIG
returns.
In toto the Venture Capital community doesn't control enough money to
buy one stinking off shore oil drilling platform;
http://en.wikipedia.org/wiki/Venture_capital
http://www.primenewswire.com/newsroom/news.html?d=117877
and it doesn't need to.
So, I challenge your contention that the $32 trillion of assets out
there that are controlled by the 9.5 million of the wealthiest people
in the world
http://www.us.capgemini.com/worldwealthreport07/
Is fully utilized in a way that reliably makes more than 12%
annualized compounded rate of return.
It doesn't.
And that creates opportunities for folks to create projects - like
creating a limited fleet of a dozen Mach 3 super concordes to serve
the Tokyo LA market and NYC London market.
And with the success of this project, then we could canvass Congress
to link the 2,475 miles from LA to NYC with these puppies and fly
cross-country in 1 hour and 15 minutes!!
That way,you could fly from London, NY, LA, and Tokyo - and back, in a
day!
Mxsmanic
> I think you've got it wrong when you say Boeing and Airbus can afford
> to develop their own planes. They don't! haha.. Aerospace is not
> the most profitable business to be in, and Boeing comes up dead last
> in Yahoo's Aerospace Group when you look at Price Performance..
>
> Leaders in Price Performance (Intraday)
> VECTR SYSTEMS, INC. [vect.ob] +12.90%
> RAYTHEON CO (NEW) [rtn] +1.18%
>
>
> Laggards in Price Performance (Intraday)
> SEQUA CP CL A [sqa-a] -1.29%
> BOEING CO [ba] -0.05%
What is price performance? If it has anything to do with the stock market,
it's irrelevant.
Mxsmanic
> The reason Airbus could, and Boeing didn't was because of the
> way the Airbus could finance it and Boeing couldn't.
Being able to finance something doesn't make it a good idea.
Willie...@gmail.com
Unh huh, hats why price performance is the most frequently used
indicator by serious stock analysts haha.. You''ve revealed your
ignorance sir and guaged your level of fiscal sophistication. Its
just as if someone asking an aerospace engineer what good is power to
weight or yeild strength ratio! lol.
Other than to point out the obvious, I don't know realy what to say.
I've proposed a project that allows someone to earn 12% return on
investment on $18 billion over a 4 year period by building a fleet of
a dozen Mach 3 transports.
Boeing is presently earning less than 6% ROI - and on a price
performance basis, its losing ground. Something like this is beyond
the fiscal capacity of Boeing to do. It is not beyond Boeing's
technical abilities however, so this is ideally suited as a Boeing
backed project. The only thing issing is the fiscal sophistication to
structure an appropriate project. Such large-scale projects are
routine in the energy business. They are not routine in the aerospace
business.
The Russians, having lost their sponsor,and naturally very clever when
it comes to money, despite decades of statist control, have naturally
hit upon project financing in starting their space tourism business.
The $20 million they get every 8 months or so from one of the 9.5
milion who control $32 trillion in assets around the world, is a start
along this path. Boeing could do them far better - with this project.
.
me
Nor the converse.
me
> On Aug 30, 9:00 pm, me <oconn...@slr.orl.lmco.com> wrote:
> > On Aug 30, 4:36 pm, Willie.Moo...@gmail.com wrote:
> > [snip]
> > > mach 3 SSTs, a specialty company may contract with Boeing and make the
> > > kind of returns mentioned in this niche market case. The niche market
> > > players would also be well situated should there be a change in the
> > > fundamental cost of energy in society due to a break through in
> > > nuclear powered chemosynthesis or low-cost solar power and so forth.
>
> > However, anyone who could raise that kind of capital to develope such
> > an aircraft, could make vastly larger sums investing in other markets/
> > products.
>
> Really? You're the guy who said that Boeing doesn't invest in Mach 3
> cruisers because it finds investing in 747s more profitable. Fact is,
> Boeing earns less than 6% on equity while the project I outlined above
> earns 12%. Boeing doesn't have $18 billion and if it could arrange
> financing for $18 billion it would be sinking the company. So, by all
> rational measures, Boeing cannot reaonsably be expected to take the
> risk for this project alone. But it reasonably could arrange this as
> a private project and seek financing throgh a project financing model.
I could probably dig it up, but when the current CEO of Boeing
took over, one of the comments he made was that financing, in the
open market, of new planes was very difficult to do. The paybacks
are long and the costs can be high. The reason that they need
a certain amount of orders prior to beginning full development is
because they need those orders to attract the financing. I agree
that IF an consortium could be assembled to directly finance
the project outside of the market could be assembled, Boeing
would be far more attracted to the project. It's basically a way of
spreading the risk.
I do know that developing the L-1011 just about sunk Lockheed
and that was a relatively successful plane.
> > Greed is a powerful incentive.
>
> It ismy experience that people who have more than $1 billion cash
> available have a hard time earning more than 3% after taxes with it.
> They invest in companies like Boeing, and Walmart, but those folks
> have a hard time earning more than 6%. That's why people with over $1
> billion to invest seek special projects that might earn 12% or more.
> This is how off-shore drilling platforms get built for $7 billion for
> example. There's no reason that a fleet of Mach 3 super-concordes
> couldn't get built the same way.
[snip]
No reason other than the risk is vastly higher than an off shore
drilling platform for which the products thereof have a well
established
market. If such a consortium could be created, I'd suspect it
would need players with other vested interests. Countries that
thought they'd gain with the existence of such aircraft, airlines
that thought they could get a market advantage, component vendors
that thought they could get a market advantage from contributing to
such an aircraft. I just also suspect that the deck is currently
stacked
against such an affiliation being formed because of the current
market issues with the airline industry. Buffet for example has
little if any interest in the airline industry.
Mxsmanic
> Unh huh, hats why price performance is the most frequently used
> indicator by serious stock analysts haha..
There's no such thing as serious stock analysis. The stock market is a form
of legalized gambling.
Furthermore, stock prices have absolutely no influence on the health of a
company, nor are they any reflection at all of its health. Stock prices are
determined by emotion, which in turn drives supply and demand. Stock has no
intrinsic value.
> Other than to point out the obvious, I don't know realy what to say.
I agree.
> I've proposed a project that allows someone to earn 12% return on
> investment on $18 billion over a 4 year period by building a fleet of
> a dozen Mach 3 transports.
Will you cover that 12% out of your pocket if it the return turns out to be
less? If not, why not?
Bob Myers
<Willie...@gmail.com> wrote in message
news:1188523404.5...@q3g2000prf.googlegroups.com...
> Really? You're the guy who said that Boeing doesn't invest in Mach 3
> cruisers because it finds investing in 747s more profitable. Fact is,
> Boeing earns less than 6% on equity while the project I outlined above
> earns 12%. Boeing doesn't have $18 billion and if it could arrange
> financing for $18 billion it would be sinking the company. So, by all
> rational measures, Boeing cannot reaonsably be expected to take the
> risk for this project alone. But it reasonably could arrange this as
> a private project and seek financing throgh a project financing model.
Well, tell you what - you take your "project outline"
to Boeing, or anyone else, and see how quickly you can
arrange funding for it. If you're right, you'll wind up
rich. If not, well, at least the resulting crash-and-burn
will be educational for you and entertaining for the rest
of us.
Bob M.
Bob Myers
<Willie...@gmail.com> wrote in message
news:1188548664....@x40g2000prg.googlegroups.com...
> I've proposed a project that allows someone to earn 12% return on
> investment on $18 billion over a 4 year period by building a fleet of
> a dozen Mach 3 transports.
Yes, you have. And put that way, it sure as hell looks
really attractive. Now the question you have to ask yourself
is why someone isn't doing it already.
If it's simply because you're the first one to think of it, you
just did a REALLY stupid thing by plastering it all over
the net.
If there's any other reason as to why this isn't being done -
well, in that case, you may be in for a rude awakening.
I know which way I'm going to be betting between these
two options, by the way.
Bob M.
Willie...@gmail.com
> Willie.Moo...@gmail.com writes:
> > Unh huh, hats why price performance is the most frequently used
> > indicator by serious stock analysts haha..
>
> There's no such thing as serious stock analysis. The stock market is a form
> of legalized gambling.
No its not. You obviously know very little about this subject. I bet
you don't even know the value of the retail function and think
shopkeeps don't do a damn thing to earn the $5 selling stuff that they
buy from manufacturers and farmers for $1. haha..
>
> Furthermore, stock prices have absolutely no influence on the health of a
> company,
hmm.. again, you are clearly clueless about this subject.
nor are they any reflection at all of its health.
haha.. you are plainly going from bad to worse sir. Tell that to the
folks who work at Enron! haha...
> Stock prices are
> determined by emotion,
No they aren't.
> which in turn drives supply and demand. Stock has no
> intrinsic value.
Again, what am I supposed to say to that? Except to say you are
surely so ignorant of this subject, you don't know that you don't know
a damn thing about the subject.
> > Other than to point out the obvious, I don't know realy what to say.
>
> I agree.
You have removed my statement from the context in which it was
written. So, in addition to being totally ignorant on the subject you
are speaking of, you have marked yourself as a dishonest idiot as
well. Good show! lol.
> > I've proposed a project that allows someone to earn 12% return on
> > investment on $18 billion over a 4 year period by building a fleet of
> > a dozen Mach 3 transports.
>
> Will you cover that 12% out of your pocket if it the return turns out to be
> less?
You live in a world where the future is predictable and things are
guaranteed? haha.. This just keep getting better and better. Let me
show you some annuities I'd like to sell you. haha..
> If not, why not?
I would be happy to sell you a guaranteed on the 12% - what is your
investment? I will give you a premium that will guarantee it.
haha.. Again, obviously, you really are clueless.
And, as a result, I really don't know what to say in the face of such
profound ignorance.
Willie...@gmail.com
> <Willie.Moo...@gmail.com> wrote in message
>
> news:1188548664....@x40g2000prg.googlegroups.com...
>
> > I've proposed a project that allows someone to earn 12% return on
> > investment on $18 billion over a 4 year period by building a fleet of
> > a dozen Mach 3 transports.
>
> Yes, you have. And put that way, it sure as hell looks
> really attractive. Now the question you have to ask yourself
> is why someone isn't doing it already.
The answer to that one is obvious.
> If it's simply because you're the first one to think of it, you
> just did a REALLY stupid thing by plastering it all over
> the net.
Yeah, that's real smart. The best way to execute on an idea involving
thousands if not tens of thousands of people buying and selling of
publicly traded assets is to keep it under your hat! lol.
Jesus, Bob, look up a description of Project Financing - its not a
goddamned state secret! lol.
http://en.wikipedia.org/wiki/Project_finance
These sorts of financings have been used in developing energy
resources, and even in building things like highways and bridges that
collect tolls.
Its not a great leap of imagination to think of a fleet of a dozen
Mach 3 aircraft as a sort of bridge for which there is a proven
traffic volume and price. The experience of the XB70 and the Concorde
even give us some appreciation of the cost structures.
.
> If there's any other reason as to why this isn't being done -
> well, in that case, you may be in for a rude awakening.
You obviously have a great faith in the efficiency of the marketplace,
and a great lack of practical experience in such matters.
> I know which way I'm going to be betting between these
> two options, by the way.
And that means what exactly?
> Bob M.
When has putting out a couple of numbers caused major problems for
anyone?
Look its one thing to say if I buy a 1/10th pound of hamburger for
eight cents and a sesame seed bun for a nickel and a bit of mayonaise
and cheese for three cents - I could sell it for a dollar and make
money on each hamburger I sell.
And its easy to prove that given those numbers if I sold 1,000
hamburgers a day, I'd have a restaurant that might be worth $2,500,000
if I did that every day. Its also easy to show that if I had 20,000
restaruants I'd have a chain of restaurants worth $50 billion. .
Its another to execute on those numbers. To know how to make a tasty
burger at a decent price. To make and sell 1,000 per day year in year
out. To organize and run an operation so you aren't doing all the
work. To expand that in more than one location. To build up 20,000
locations so they all operate without interference..
Similarly, throwing out a few valid numbers using a project financing
approach for a super-concorde project doesn't tell all. There is a
lot to making this super-concorde work. Anyone with practical
experience in building a business understands that. Anyone with a
practical sense of what's needed can speak of what they can do as I
have here without any fear whatever. And building the planes
themselves is only a small part of task. To do other than talk freely
about an idea is actually counter-productive. Which given the
history of the aerospace bis, might be another part of an explanation
for why they've never adopted project financing approaches to new
vehicle development - beyond the obvious financialand economic issues
that must be addressed
.
.
Mxsmanic
> No its not. You obviously know very little about this subject.
I know a lot about it, which I learned the hard way, after making the mistake
of trusting people who said they knew a lot about it, when in fact they
didn't.
> I bet you don't even know the value of the retail function and think
> shopkeeps don't do a damn thing to earn the $5 selling stuff that they
> buy from manufacturers and farmers for $1.
That has nothing to do with the stock market.
> haha.. you are plainly going from bad to worse sir. Tell that to the
> folks who work at Enron! haha...
I don't know what their visiting hours are.
Willie...@gmail.com
That's true.
> The paybacks
> are long and the costs can be high. The reason that they need
> a certain amount of orders prior to beginning full development is
> because they need those orders to attract the financing.
Also true. But what does this have to do with the project I've
outlined? Fact is, airplane manufacturers sell airplanes. Airlines
sell services. Where does this project I outline live? Obviously NOT
as an aircraft manufacturer, even though it causes a new line of
aircraft to be built.
> I agree
> that IF an consortium could be assembled to directly finance
> the project outside of the market could be assembled, Boeing
> would be far more attracted to the project.
Duh!
> It's basically a way of
> spreading the risk.
Anyone that approached Boeing with $18 billion and wanted something
reasonable made, that afforded them greater profit than they could
make doing what they're doing today, and used their skill sets, and
spread their costs - I will say again duh!
> I do know that developing the L-1011 just about sunk Lockheed
> and that was a relatively successful plane.
Yes. Which is why it is foolish for aircraaft manufacturers to take
that sort of risk given their margins.
> > > Greed is a powerful incentive.
>
> > It ismy experience that people who have more than $1 billion cash
> > available have a hard time earning more than 3% after taxes with it.
> > They invest in companies like Boeing, and Walmart, but those folks
> > have a hard time earning more than 6%. That's why people with over $1
> > billion to invest seek special projects that might earn 12% or more.
> > This is how off-shore drilling platforms get built for $7 billion for
> > example. There's no reason that a fleet of Mach 3 super-concordes
> > couldn't get built the same way.
>
> [snip]
>
> No reason other than the risk is vastly higher than an off shore
> drilling platform for which the products thereof have a well
> established
What risks are you talking about? Are you saying that the risk of
building a Mach 3 super concorde around the XB70 airframe and engine
set is greater than the risk of developing an off-shore drilling
platform or two? Where are your numbers? What risks? Execution
risk? I think that's pretty well nil in both cases. We know
companies and vendors who can execute on the task. Regulatory risk?
Again, pretty much nil in both cases. There are air routes and oil
leases already in place. The only thing I can see is a comparison of
market risk with discovery risk - so which is higher? Show me the
numbers? We know the demand for Concorde already - to a greater
degree than a geologist can assure us of the existence of oil beneath
the waves where we might plan to put an off shore platform. So, I
would say any real comparison of numbers would tend to favor the Mach
3 transport.
> market. If such a consortium could be created, I'd suspect it
> would need players with other vested interests.
Not really. There are 9.5 million people in the world that control a
total of $32 trillion - most of it liquid. That's an average of
nearly $30 million per person. If 1% of them could be persuaded to
invest in this project, that's 100,000 investors - $180,000 each - a
little more than 2% of their net holdings - you'd have $18 billion.
And this could be structured in any number of ways so that they
actually make money the day they sign the paperwork.
> Countries that
> thought they'd gain with the existence of such aircraft, airlines
> that thought they could get a market advantage, component vendors
> that thought they could get a market advantage from contributing to
> such an aircraft.
These are not the folks with the money!! Get that out of your head.
These are folks who are working for a living. And anyone who works
for a living knows you can't make money doing your own laundry.
You've got to have a customer a qualified customer who is willing to
pay you to do the work you know how to do.
> I just also suspect that the deck is currently
> stacked
> against such an affiliation being formed because of the current
> market issues with the airline industry.
Your belief that such an affiliation is needed to raise money is
fundamentally flawed. All these folks work for a living. They have
nothing to do with the people who have the capital to invest in
projects like this.
> Buffet for example has
> little if any interest in the airline industry.-
Yeah, that's why he's a major investor in NetJets! lol.
Look, if I had an appropriately structured offer that took into
account the issues and concerns facing most high net worth individuals
where they live, and gave them the opportunity to make 12% ROI doing
something like making a super-concorde - I could easily raise $25
billion in a few months for the project - given the condition of the
market, and the need for folks in China and India, where most new
wealth is these days - to put some of their assets to work, in low
risk ventures like this one.
.
Willie...@gmail.com
> <Willie.Moo...@gmail.com> wrote in message
>
> news:1188523404.5...@q3g2000prf.googlegroups.com...
>
> > Really? You're the guy who said that Boeing doesn't invest in Mach 3
> > cruisers because it finds investing in 747s more profitable. Fact is,
> > Boeing earns less than 6% on equity while the project I outlined above
> > earns 12%. Boeing doesn't have $18 billion and if it could arrange
> > financing for $18 billion it would be sinking the company. So, by all
> > rational measures, Boeing cannot reaonsably be expected to take the
> > risk for this project alone. But it reasonably could arrange this as
> > a private project and seek financing throgh a project financing model.
>
> Well, tell you what - you take your "project outline"
> to Boeing, or anyone else, and see how quickly you can
> arrange funding for it.
Why would I go to Boeing for funding? I just spent a few hundred
lines proving they don't have the money to do a project like this.
Are you deaf or just dense? lol.
> If you're right, you'll wind up
> rich.
What makes you think I'm not rich already? haha..
> If not, well, at least the resulting crash-and-burn
> will be educational for you
On what basis do you presume i'd crash and burn, and what do you think
such a crash and burn scenario would teach me?
> and entertaining for the rest
> of us.
Why do you think i care about your entertainment?
> Bob M.
Willie...@gmail.com
> Willie.Moo...@gmail.com writes:
> > No its not. You obviously know very little about this subject.
>
> I know a lot about it, which I learned the hard way, after making the mistake
> of trusting people who said they knew a lot about it, when in fact they
> didn't.
Just because you got ripped off doesn't mean you learned anything of
substance. Take a course, or go to a college bookstore and get a
reading list! sheez.
> > I bet you don't even know the value of the retail function and think
> > shopkeeps don't do a damn thing to earn the $5 selling stuff that they
> > buy from manufacturers and farmers for $1.
>
> That has nothing to do with the stock market.
Riiiight... haha.. the price of bacon at your local retailer has
nothing whatever to do with the price of pork bellies! haha.. you're
a trip man.
> > haha.. you are plainly going from bad to worse sir. Tell that to the
> > folks who work at Enron! haha...
>
> I don't know what their visiting hours are.
The one's that are still alive sure. But despite your willingness to
repeat your errors to people who have suffered the consequences of the
very connection you say doesn't exist doesn't make you right.
mrtravel
> On Sep 1, 12:47 am, Mxsmanic <mxsma...@gmail.com> wrote:
>
>>Willie.Moo...@gmail.com writes:
>>
>>>No its not. You obviously know very little about this subject.
>>
>>I know a lot about it, which I learned the hard way, after making the mistake
>>of trusting people who said they knew a lot about it, when in fact they
>>didn't.
>
>
> Just because you got ripped off doesn't mean you learned anything of
> substance. Take a course, or go to a college bookstore and get a
> reading list! sheez.
>
>
>
>>>I bet you don't even know the value of the retail function and think
>>>shopkeeps don't do a damn thing to earn the $5 selling stuff that they
>>>buy from manufacturers and farmers for $1.
>>
>>That has nothing to do with the stock market.
>
>
> Riiiight... haha.. the price of bacon at your local retailer has
> nothing whatever to do with the price of pork bellies! haha.. you're
> a trip man.
>
The price of pork bellies is NOT part of the STOCK market.
Mxsmanic
> Just because you got ripped off doesn't mean you learned anything of
> substance.
I wasn't ripped off. I was simply told that the stock market was a sound
investment, which isn't true.
> Riiiight... haha.. the price of bacon at your local retailer has
> nothing whatever to do with the price of pork bellies!
Pork bellies are not shares in a corporation.
Bob Myers
<Willie...@gmail.com> wrote in message
news:1188623128.5...@57g2000hsv.googlegroups.com...
> Why would I go to Boeing for funding? I just spent a few hundred
> lines proving they don't have the money to do a project like this.
> Are you deaf or just dense? lol.
Not sure what "deaf" would have to do with anything
in a text-based medium such as this. As far as "dense" -
you DID see the "or anyone else" after "Boeing," right?
>> If you're right, you'll wind up
>> rich.
>
> What makes you think I'm not rich already? haha..
>
I don't know for a fact that you're not, but the "rich"
generally exhibit a better understanding of market
forces and industrial realities than you are showing here.
>> If not, well, at least the resulting crash-and-burn
>> will be educational for you
>
> On what basis do you presume i'd crash and burn, and what do you think
> such a crash and burn scenario would teach me?
Why don't you simply try it, and find out? Experience
is always the best teacher...
Bob M.
Willie...@gmail.com
>
> - Show quoted text -
Commodities market... true - but surely you see what I'm getting at
don't you?
Willie...@gmail.com
No they are commodities that are traded on an open exchange marrket,
just like stocks are trated. Surely you see the similarities don't
you? Clearly you see what I'm getting at don't you?
Willie...@gmail.com
> <Willie.Moo...@gmail.com> wrote in message
>
> news:1188623128.5...@57g2000hsv.googlegroups.com...
>
> > Why would I go to Boeing for funding? I just spent a few hundred
> > lines proving they don't have the money to do a project like this.
> > Are you deaf or just dense? lol.
>
> Not sure what "deaf" would have to do with anything
Obviously metaphors are beyond your capacity as well.
> in a text-based medium such as this. As far as "dense" -
> you DID see the "or anyone else" after "Boeing," right?
now now, don't try to parse your way out of this. The context of what
you said was clear enough.
> >> If you're right, you'll wind up
> >> rich.
>
> > What makes you think I'm not rich already? haha..
>
> I don't know for a fact that you're not, but the "rich"
> generally exhibit a better understanding of market
> forces and industrial realities
Just because i don't believe in your fantasies doesn't make me
'wrong' haha..
> than you are showing here.
You mean the 'rich' always agree with your misjudgements about how
markets work? That's a laugh.
> >> If not, well, at least the resulting crash-and-burn
> >> will be educational for you
>
> > On what basis do you presume i'd crash and burn, and what do you think
> > such a crash and burn scenario would teach me?
>
> Why don't you simply try it, and find out? Experience
> is always the best teacher...
Try what exactly? Sponsor a project such as the one I described?
That's always a possibility. I'm thinking about it.
> Bob M.
Mxsmanic
> No they are commodities that are traded on an open exchange marrket,
> just like stocks are trated. Surely you see the similarities don't
> you?
What I see is the critical difference: pork bellies have intrinsic value,
whereas shares in a company do not.
> Clearly you see what I'm getting at don't you?
I see where you are going; do you?
mrtravel
Didn't I say that 9 hours earlier?
Mxsmanic
> Didn't I say that 9 hours earlier?
Yes, you did, but you are not the one who remains unconvinced.
Willie...@gmail.com
> Willie.Moo...@gmail.com writes:
> > No they are commodities that are traded on an open exchange marrket,
> > just like stocks are trated. Surely you see the similarities don't
> > you?
>
> What I see is the critical difference: pork bellies have intrinsic value,
> whereas shares in a company do not.
Well this is where you are wrong. Most people who buy and sell pork
bellies on the exchange have no intention of taking delivery on their
positions. And money expended on a commodity exchange do not
generally speaking find its way into the pockets of pork producers any
more than money traders pay for stock finds its way into the pockets
of corporations. Nevertheless, establishing a value for stocks and
commodities on an exchange provides liquidity to both pork producers
and company managers.
The genius of an exchange, whether its trading stock or commodities is
that it arrives at fair and equitable valuations independently of the
emotions you decried earlier. Depending on how you care to define
intrinsic value, some would say that a corporatoin has an enterprise
value every bit a real as the value of pork bellies. Others would
argue that changes in public attitudes could decimate the value of
commodities just eas easily as it could affect the value of
corporations. A health study that convinced large numbers of people
not to eat pork, might create a glut in the pork belly market and
collapse trading, while a rise in gasoline prices might cause people
to shift to smaller vehicles or even dispense with vehicles
altogether, creating troubles for large vehicle producers.
-
> > Clearly you see what I'm getting at don't you?
>
> I see where you are going; do you?
You apparently appreciate and see nothing of what I'm discussing. You
are more interested in protecting your ill concieved ideas of value -
even though they fly in the face of market realities.
As I said before, you have said so many ignorant things that are so
fundamentally flawed, it is difficult for us to have a useful and
intelligent conversation on this subject. And doing so would be far
removed from what I was originally talking about - namely, project
financing has a real potential to create a small fleet of Mach 3 super
concordes. haha..
Willie...@gmail.com
And I replied that both stocks and commodities are traded on an
exchange and through this process of trading arrive at share value or
contract value - based on the underlying corporation or commodity
independently of the enthusiasms or lack thereof of individuals in the
market. This trading process creates liquidity for the companies
being traded as well as for the producers of the commodities - and
this is far removed from gambling to which it was erroneously
compared.
.
Mxsmanic
> Well this is where you are wrong. Most people who buy and sell pork
> bellies on the exchange have no intention of taking delivery on their
> positions.
They have intrinsic value whether someone takes delivery or not. That's very
different from a piece of paper with no intrinsic value at all.
It is true that there is a great deal of speculation with pork bellies, as
with land and just about anything else. Almost anything can be used as a
basis for gambling. But having intrinsic value is very important, as it means
that you still have something even if you lose at gambling or speculation.
> And money expended on a commodity exchange do not
> generally speaking find its way into the pockets of pork producers any
> more than money traders pay for stock finds its way into the pockets
> of corporations.
It doesn't have to.
> The genius of an exchange, whether its trading stock or commodities is
> that it arrives at fair and equitable valuations independently of the
> emotions you decried earlier.
The genius of an exchange is that it allows people to speculate wildly and
still remain respectable in the eyes of their peers. It even gets to the
point that people are respected _more_ because they regularly gamble on an
exchange. It's just one of the strange things in our society. Gamble with
dice or playing cards, and many people consider you to be just short of a
gangster; gamble with stocks and bonds, and many people consider you to be a
pillar of society. And yet you're doing the same thing in both cases.
> Depending on how you care to define
> intrinsic value, some would say that a corporatoin has an enterprise
> value every bit a real as the value of pork bellies.
Stock in a corporation is worthless unless the corporation is liquidated, and
even then, a corporation in liquidation is usually overextended in debt, and
creditors will get the proceeds from liquidation before shareholders,
typically leaving the shareholders with nothing.
So stock is actually worthless paper. Unless you can find the "greater fool"
who will buy it for more than you paid for it, you lose.
> You apparently appreciate and see nothing of what I'm discussing.
I've learned the hard way that playing with stocks and bonds is indeed
gambling, with the same risks and payoffs, and the same fundamental
uncertainty. The fact that people do it in business suits doesn't change
anything.
> You are more interested in protecting your ill concieved ideas of value -
> even though they fly in the face of market realities.
I'm more interested in not making the same mistake twice.
> As I said before, you have said so many ignorant things that are so
> fundamentally flawed, it is difficult for us to have a useful and
> intelligent conversation on this subject.
As I've said before, personal attacks are the last resort of someone who has
no other cogent argument to support his position.
Mxsmanic
> And I replied that both stocks and commodities are traded on an
> exchange and through this process of trading arrive at share value or
> contract value - based on the underlying corporation or commodity
> independently of the enthusiasms or lack thereof of individuals in the
> market.
That value is illusory and completed unrelated to the valud of an underlying
corporation or pork belly. The intrinsic value of pork bellies is quite low.
The intrinsic value of stock in a corporation is essentially zero. All of the
"value" of which you speak is speculative and imaginary, and results from
greed and (for most traders) ignorance.
> This trading process creates liquidity for the companies
> being traded as well as for the producers of the commodities ...
Shares in a corporation create nothing at all for the corporation except when
it first sells them. Thereafter they are worthless paper.
mrtravel
Not entirely correct. Many people gamble on the markets.
They don't buy the stock because the current valuation is realistic, but
because they expect the price to go up, because people are caught up in
the upswing. We saw a lot of this in the late 1990's.
Not all people who buy stock actually research it to know whether the
fundamentals indicate whether it should go up or down.
mrtravel
As long as the company has any value, how can you say the shares are
"worthless"?
Willie...@gmail.com
> Willie.Moo...@gmail.com writes:
> > Well this is where you are wrong. Most people who buy and sell pork
> > bellies on the exchange have no intention of taking delivery on their
> > positions.
>
> They have intrinsic value whether someone takes delivery or not. That's very
> different from a piece of paper with no intrinsic value at all.
The piece of paper that gives you the right to take delivery of a
commodity is very similar to a piece of paper that gives you the right
to a portion of the profits of a corporation for the term of its
existence. I don't know what you mean by 'intrinsic value' I suspect
you don't either. Clearly both may have value, whether its more or
less than the value you paid the day you bought the paper, is a matter
for the exchange to determine.
>
> It is true that there is a great deal of speculation with pork bellies,
What is true is that the future cannot be predicted, with precision
and so there is a natural tendency for markets to create vehicles
whereby any risks associated with this inabilty or inefficiency are
mitigated.
> as
> with land and just about anything else.
Including the future performance of a coporation...
> Almost anything can be used as a
> basis for gambling.
There's where you got it wrong son.
> But having intrinsic value is very important,
Again, I don't know what you mean when you say the words, "Intrinsic
Value" and I suspect neither do you. However, a company can have
demonstrable value. For ecample, Sam, a donut shop can have a book
value - the value of the ovens, the mixers, the cash register, the
coffee makers, the buildings, the land, the parking lot - these might
be $380,000. Then there are the intangibles. Like, location. They
might be on a well travelled corner. So, a market may exist for that
location. A company that operates gasoline stations may therefore
offer to buy the land that the donut shop owner purchased for $100,000
a few years ago, for $1,000,000 - more than the book value of the
whole company - without wanting to touch his company. Why does this
market exist? Because people can't predict the future. They can't
say for sure where the really high traffic areas will be over time..
and over time, some people are lucky and some are not.
Now, should the donut shop owner take the deal? After all, he could
pick up his shop and equipment and move it elsewhere.. But then he
might lose sales. Those sales after all are what the oil company wants
- and if he moves away he might lose those. So, the donut shop
owner figures that he makes a free cash flow before taxes and
depreciation allowance, of about $10,000 per week - after paying all
recurring costs. That's $520,000 per year. What's the value of
that? Well, he figures he's got another 32 years before he retires,
and $520,000 x 32 years = $16,640,000 - is what he would earn. His
banker said the present value of his income stream when depreciated
over this time is worth about $7,000,000 - this takes into account
time-value of money. That is, that dollar he earns 32 years from now,
does not contribute to the value TODAY that it will have then. But as
a going concern, he thinks he's worth somewhere between $7 million and
$16 million - and he would likely lose part of that value if he
moved. And that's what he should askfor. Now, he knows cause he goes
to the weekly community business meetings that Fred who runs a coffee
shop over near main street was approached by these oil guys. Fred
wouldn't say what he was offered, but he knows for a fact that Fred
does half the business he does, he figured that out one day when the
coffee supply truck broke down, and he had to go over and make an
emergency order. He's been paying a little more for coffee, and
giving Fred free donuts ever since then. But he knows for a fact that
Fred will retire in a few years, and if he got paid by the oil company
some large figure over a million dollars, he and Judy would likely
take a year or two off and then reopen the shop after on Fred's
place. He thinks he could make fred and offer to buy the property
there for less than half of what he got here, and be ahead, but he
would have to get the full value for the value of his property here
today! So, the donut shop owner has just convinced himself he needs
to get at least $7 million minimum or he won't sell.
That's a real value to that donut shop owner.
Now, what's the land worth to the oil company? That's a tougher
one. And important to know going in. He goes to his banker, Bob,who
he's done business with for years, and Bob has given him loans over
the years for equipment leases and his home and cars. He and Bob sit
down at the golf club where he likes to have lunch. He asks Bob the
question - what do you think the oil company pay for my land? Do you
think they'd pay $7 million? Bob smiles. He reaches into his $800
Brooks Brothers attache, Sam, dressed in his Sunday best suddenly
becomes self concious of his rough hands,made that way from years of
dipping donuts on hot oil and being covered with powdered sugar and
flour - he puts them under the table as Bob reaches into his attache.
Bob says, I've been thinking about that and I've been looking at their
10K and 10Q. Yeah? Sam says. Well I used to be an accountant back in
the day, and I went over their figures and found that they spend 12%
of their sales on property - on average. which includes all their
equipment and so forth. And that their average sales per location is
about $20 million per year. Their enterprise value is $120 billion
and they have 1200 stores - so each station is worth about $100
million figured that way, and they spent $12 million per station for
property. on average. Now this includes the cost of their building
pumps and so forth. Now I went to the American Petroleum Institute
website - he reaches in his valise again - and found that the average
gas station spends about $3 million for equipment. Sam takes it all
in. Bob is smiling behind his salmon filet. Sam hasn't touched his
hamburger. So,Samsays, that means they'll pay $9 million. Bob smiles
- on average - your location as you know, has benefitted greatly from
that new off ramp opening just North of you. That's true - that's
likely why Doug sold his barber shop down the street and that new
Starbuck's opened. So, more than $9 million then? YES Bob says, I
think you could likely ask $18 million and they'd pay it. That
much? Yes, based on the amount of money they could earn at that
location and what they expect to pay for property. I don't know if
that property has that much intrinsic value Sam says. Bob laughs as
he cuts into his filet. Something is worth only as much as someone is
willing to pay for it. That's true! Sam said. So, you think $18
million then? No one can predict what another person will do Bob
replied. But certainly it would not be an unreasonable figure. It
shows you did your homework. What if they ask me what homework? Bob
shoves the reports,along with a cover letter from the bank toward
Sam. Show them these! Sam looks at the cover letter that indicates
$18 million valuation for his property. I don't know what to say Bob,
thanks. Well, when they do buy your property, Sam, I hope you will
remember our little bank! Sure Bob, I certainly will.
So, Sam goes back to his donut shop to see how Billy is doing instead
of lulagaging around at these fancy clubs. The kid's a real find
though. He was going to the local school, but he ran short of cash
before he graduated and started working at the donut shop there. He
picked up stuff really quickly. When he had to drop out, Sam made him
a manager. He couldn't pay him what he's worth. The kid's alright.
He'll have to let him go if this deal goes through. Hell, he could
pay for his schooling if it came to that. He got back in. How did
your meeting at the club go? Get a hole in one? I've never held a
golf club and I don't think I ever will. Sam stands in the kitchen
with his legs spread apart mimicking holding a club. Looks like I'm
jerking off. Or peeing Billy laughs, not in the lemon merinque - how
are this afternoon's donuts going? Did you rob me blind while I was
gone? They worked the rest of the day, and Sally came in on the Swing
shift. Damn, what is he going to do about her? If he sells out and
has tolay her off for a year or two? She won't find it easy to get
another job. Sam just added another $200,000 to the minimum figure -
for the cost he felt he had to pay to his employees.
Sam was always good at selling cars, and he figured this was like any
car he'd sell. What did it cost me? What is it worth to me? What
is it worth to the buyer? He figured with Bob's help he knew the
'box' things were in. $7.2 million was his minimum. $18 million was
the most the buyer would likely pay - but actually, $16.6 million is
the way he figured it. So, that's what he'd come back with he
figures.
Billy doesn't want to go back to school, he feels he's too old, and
with his kid and wife, he has a pretty good routine. So, that's an
issue. So Sam came up with a plan. They could take it or leave it.
The day of the meeting came. He met a few times with folks who took
figures back to the offices and such - and they didn't get anywhere.
Finally Sam told all those suity types to go to hell, and send someone
over that can write a chack and then he'll talk turkey. So, sweet
young lady called and informed Sam that Mr. Anderson, who was the CEO
of this oil company was going to fly in to close this deal with Sam
next Tuesday, would 10:30 be okay?.
He said they knew where to find him. So, about 10:30 a big black limo
pulls into the parking lot and out gets a man dressed in the sharpest
looking suit he ever saw. The cops coming off their morning duty
nearly dropped their donuts in their coffee! Sam laughed at them.
Anderson's driver walked ahead of him and opens the door. He must've
hired it locally Sam figures cause that's the Smith's little boy
driving.
Billy jumps like a Jack Rabbit from around the counter and opens the
inner door. Sam is irritated. He's gonna get $18 million out of this
asshole - he doesn't know how much money he has spent over his life
for gas, but it sure seems like $18 million. Sam wipes a spot on the
counter and asks Andersen if he'd like a donut? Do you have a French
Crueller? Sure do, best in town. Billy get this man a French
Crueller. Would you like some coffee? Sam pours him a coffee.
Andersen sits stiffly and smiles even more stiffly. Sam turns to the
two cops. You boys want anything else? No, Sam I think we're
finished here. Good day then.
Sam smiles at Andersen. Can I get you anything else. Well, Andersen
replies, I was wondering if I could make you a millionaire today? Why
would you do that sir? Well I'd like to buy your property? Who are
you to do that? Well, I'm Mr. George Anderson, from the oil company.
Didn't my secretary call you? Some lady said something about it, but
hell, how am I supposed to know who the hell you are if you don't
introduce yourself. Well, I thought you'd know when I arrived. Mr.
lots of people drive in here, you really gotta introduce yourself.
I'm Sam. They shake hands. Well? Can I write you a check for $1
million?
Sam waits a second or so, ONE million dollars don't you mean TWENTY?
He looks at the papers Bob gave him under the register. Andersen
replies, are you insane man? No one would ever pay TWeNTY million for
this dump!. Oh C'mon Andersen, I'm sure you've paid over $20 million
for dumps worse than this in some of your 1200 locations - your averge
is $9 million - and since they opened that exit ramp on the highway
just North of here, my business has doubled!! While Sam was talking
Billy was ringing up a steady stream of customers - many of them lunch
orders for the industrial park just East on the highway. Why before I
retire, I'll make more than $20 million right here Sam opines. This
place is a gold mine for me and I'd be a fool to move away.
Andersen looks at him. Look Sam, I'm a busy man, I'll come up a
little on our offer, but $20 million is ridiculous. Well, I'll make a
million dollars this summer Sam lied, so, you can see our dilemma.
There's plenty of other property around here Sam, I don't NEED your
property. If you can get the hospital across the street to let go of
some property, or the University south of here, or the all developer
North of here to let some property go, you tell me. I'd like to see
that.
Presently they're silent. Sam nods and asks Andersen if he was done.
A lot of wasted time Sam thinks. Andersen looks at Sam. I suppose we
are he says. Sam picks up the empty coffee cup and partly eaten donut
and tosses them and wipes the counter again. That'll be $2.85 - with
tax. Andersen is taken off guard. Don't tell me you don't have
$2.85? Sam asks sweetly. Andersen pulls out his wallet, and pulls
out a $20 and tosses it down - keep the change he said. I'm sure I
will! It'll pay for about a quarter tank of gas in my delivery van
this afternoon. Sam smiles. Andersen heads for the door then turns.
Is this what all this is about? You're angry over high gas prices?
No Sam says, I'm angry at being played for a damned fool.
Andersen replies, Sam come with me, I do have to go. We're both
reasonable men, we can come to soe reasonable accomodation. The
driver opens the door for Andersen as he walks out of the donut shop.
Billy! Yeah Sam, if I don't come back in an hour, send the cops after
me. Billy guffaws. The driver starts to open the door for Sam.
Tommy, don't be making a fuss over me, just get in and drive.
They get in the limo and drive to the airfield - discussing things.
They sit on the jet still discussing. Andersen offers lunch, Sam says
he has to get back to his shop.
In the end, the oil company agrees to pay $17.1 million for the the
shop, and also agrees to sell donuts and coffee under Sam's name at
the site. If gasoline sales are more than 20% greater at this site
than average in two years, the oil company will exercise the right to
sell Sam's donuts at 60 locations in the State. If they increase sales
throughout the region by 5%, the oil company will buy out Sam's
business and sell his recipe system wide for $100 million.
So what is Sam worth?
If Sam got sick and couldn't work any more, he'd not be worth very
much before the deal.
If the bank had to foreclose on Sam's property, they'd be lucky to get
$380,000
If Sam took the oil company's initial offer Sam would be worth $1
million.
If Sam took the oil company's offer for his property he'd be worth
$17.1 million.
But because Sam bought out Fred, for $1 million - because Fred asked
Sam how much they offered him? Sam said they offered him $1 million
- and before Sam could say AT FIRST - Fred said that's what he wants.
Sam looked at Fred and Fred looked at Sam, and Sam said okay! haha..
And wrote Fred a check right there. No waiting no beating around the
Bush. Hell, he barely knew any of the people who worked for Fred.
Hey Fred, what about your business and employees? Its your problem
now asshole! And he never saw Fred again. He turned to Julie, who
said, Fred's an asshole. Well, now he's an asshole with money Sam
said. I get the idea you're the one around here Julie that holds
everything together. Pretty much she said. So, we're making donuts
or what? Eventually Sam said, but what do you have to do this
afternoon? Lets take care of our customers first eh?
And that's what they did.
Sam called Billy on his cell ;phone - he bought everyone cell phones
recently, and he felt sort of fun calling him. Billy call Sally and
get her in at the shop, I need you over at Fred's place - there's an
emergency. How come we never had emergencies before cell phones?
haha.. I don't know. lol.
So, they sat down. Julie, Billy and Sam, figured out how to make
donuts at Fred's place, and ship them to the gas station when it was
done. And set up to sell donuts around town as well - since they had
to figure all that out. Sam bought a warehouse behind Fred's and got
a friend of his to clean it up so the health inspector wouldn't puke
when they went through it - and then made a big donut kitchen. He
spruced up Fred's place. College kids mostly, who liked the place to
study and meet other kids. So, he didn't put in the plastic counters
and signs at his old place. They didn't go for donuts either, so he
learned about scones and bagels, and muffins instead.. which they
loved. He reviewe the pay of the employees, and watched them all.
There were a few laggards he had to let go, but he almost doubled the
wages of most, and lifted the stupid ban Fred had on tipping. That
made the rest of them happy and eager to work.
He had to go to a few meetings with the oil company people who wanted
to see his product. Julie said, leave that to me. She prepared some
stuff on her computer, and made some nice display boxes with not only
the donuts Sam made, but the scones and specialty coffes and muffins
he added. After the first meeting Sam sent Julie to all the others to
talk with those assholes - while he tended the coffee shop. Julie was
thrilled.
Bottom line our riches are measured by what we do for one another - by
what we are willing to give and what we are willing to receive. - in
the end the oil company increased its value by 20% by its association
with Sam, and was happy to pay him $100 million - for that
association. Sam wasn't the type to sit around on his hands, and
after taking a round th eworld cruise his wife always wanted, he
started up another little store, built around the idea of being of
service to his customers.
> as it means
> that you still have something even if you lose at gambling or speculation.
If Sam had had a heart attack before the oil company came along he
would have lost the shop and would have lost out on the opportunity to
become one of the richest men in America. But he didn't so he
didn't.
Life is a gamble, markets reflect that. That doesn't mean markets do
not add value.
> > And money expended on a commodity exchange do not
> > generally speaking find its way into the pockets of pork producers any
> > more than money traders pay for stock finds its way into the pockets
> > of corporations.
>
> It doesn't have to.
Markets exist because uncertainty exist and when that uncertainty
affects the value of doing business, markets arise to mitigate that
uncertainty.
> > The genius of an exchange, whether its trading stock or commodities is
> > that it arrives at fair and equitable valuations independently of the
> > emotions you decried earlier.
>
> The genius of an exchange is that it allows people to speculate wildly
YOU may have speculated wildly and lost your shirt. That's not
surprising - since your approach to the market was based on a
fundamental error of judgement and understanding.
> and
> still remain respectable in the eyes of their peers.
Clearly, you lost your shirt and you prefer to blame the market rather
than yourself. This doesn't affect the value of markets in the least,
or the value of what I propose to do with Mach 3 super-concordes.
> It even gets to the
> point that people are respected _more_ because they regularly gamble on an
> exchange.
People like Sam are respected for their intelligence, hard work, and
care they have for their customers. Markets generally tend to reward
people like that. But sometimes there are hard luck cases. Sam
could've had a heart attack before he met Andersen. That's why Sam,
always the prudent business man, buys life insurance.
> It's just one of the strange things in our society.
Obviously you are blinding yourself and creating this drama about
markets because a) you don't understand how markets really work, and
b) you don't want to take responsibility for your actions. You will
likely find a collection of like minded people who agree with you when
you drink at the bar - but they're all losers like yourself. AND
WRONG! If you get enough losers togethr talking among themselves long
enough - they'll foment a revolution and overthrow the hard working
people - rather than accept the bitter pill that they are responsible
for what has happened to them.
> Gamble with
> dice or playing cards, and many people consider you to be just short of a
> gangster;
You are ranting on and on and on - getting more agitated. There are
two kinds of people in this world. Those that make things happen.
Those that have things happen to them. Your locus of control is
outside yourself. So, you are a perpetual victim. So, you are
informed by a world view that makes you the victim. In your mind its
better being a victim than being a patsy or a fool. But none of this
has anything to do with the reality of markets or the reality of our
ability to use markets to build a Mach 3 super-concorde.
> gamble with stocks and bonds, and many people consider you to be a
> pillar of society. And yet you're doing the same thing in both cases.
People often confuse crooks with business folk. Especially people who
have never run a business. In both cases there is an exchange of
money from your pocket to the others. But in the case of the business
person, there is an exchange of something back that is worth more to
you than it cost th eperson making it. In the case of the crook,
there isn't such an equitable and fair exchange. The crook is not
being of service, the business person is.
So, folks who trade in stock and commodity exchanges are providing a
service to those who create the stock and the commodity- by making
their activities more liquid for one - and diversifying risks another
- and more benefit besides. If you entered a stock market without any
fundamental understanding of what value you are providing everyone by
just being there - then its impossible for you to consistently make
money in that market. So, its not surprising given your clearly
inadequate understanding of markets and business even - that you lost
your shirt, just like Fred did.
> > Depending on how you care to define
> > intrinsic value, some would say that a corporatoin has an enterprise
> > value every bit a real as the value of pork bellies.
>
> Stock in a corporation is worthless unless the corporation is liquidated,
As in the case above, Sam's stock can rise and fall depending on what
Sam does in response to what life offers him. Generally speaking
liquidation value is the LEAST a company is worth. With a
knowledgeable, caring, and hard working owner, a corporation can and
is worth many many times its liquidated value.
At the very least is the net present value of all that company's
future earnings. Then there's appreciation of that value if the
company is growing or enters a strategic relationship. Bob the
banker, knowing Sam, would gladly loan Sam the money he needs knowing
what he's doing and what he's involved in.
If the oil company changed its mind, if Sam got mugged one night after
he closed up, before he understood Julie's strengths - things could
change, and Bob would be exposed financially for that loan - but Sam
carries enough insurance, and that's not really an issue in Bob's
mind.
In the real world lots of things can happen - but with a little luck,
a lot of hard work, and intelligence and care - value can be created
by people working together - and markets reflect that reality.
> and
> even then, a corporation in liquidation is usually overextended in debt, and
> creditors will get the proceeds from liquidation before shareholders,
> typically leaving the shareholders with nothing.
>
Creditors who believe in a company will extend it credit, especially
if there appears to be growth and credit can assist in that growth.
> So stock is actually worthless paper.
It depends on how people regard it. Stocks, bonds, contracts,
currency - a dollar bill is a worthless piece of paper if no one takes
it in exchange for their time and trouble of taking care of you. Look
at the hyperinflation Germany suffered in world war 1 - or the stock
market crash of the 30s. or the fate of Jewish owned businesses and
Jewish families on Krystalnacht. These things ARE worthless peices of
paper if everyone regards them that way. But to the extent they are
accepted at legitimate symbols to be taken seriously, they represent
fundamental value and wealth.
> Unless you can find the "greater fool"
> who will buy it for more than you paid for it, you lose.
Wealth is created by people doing things for one another. Markets are
a way they may do that and share equitably in the wealth that they
both create.
Say there are three farmers that live in a valley and they all like
baseball. So, in their spare time these three make baseball
paraphenalia.
The pig farmer makes gloves. The herdsman makes baseballs. The
woodsman makes bats. Over the course of the year they each make 3
balls, 3 bats and 3 gloves.
Now there's an autumn festival in the valley and everyone goes to town
to sell their wares. The herdsman trades one ball for a bat, and one
ball for a glove. The woodsman trades his spare bats for a glove and
ball. The pig farmer trades his gloves for a ball and bat. These
trades take place irrespective of how much the wood or leather costs.
These trades take place irrespective of how much time it takes to make
each of the items or the cost of the tools involved or knowledge
involved. They take place because those making the trades are better
off after the trade than before.
Why?
Because before the trades no one could play ball.
After the trades, all could.
So, even though the partying and carousing at the festival produced no
products - and in fact consumed a lot of liquor and broke a few mugs
and plates in the process - wealth was created in the valley.
Understand how this could be - people paying good money for
foolishness, spending a week coming and going and sitting on their
asses and spending hard earned money on trifles - being ahead
financially after.
Understand how this is, and you understand the power and benefit of
free markets.
And you understand the depth of your obvious ignorance.
> > You apparently appreciate and see nothing of what I'm discussing.
>
> I've learned the hard way that playing with stocks and bonds is indeed
> gambling,
FOR YOU who didn't take the time and trouble to understand the
fundamentals. You're like the guy who is unhappy that his son dies in
childbirth after saying he'll deliver the baby himself instead of
paying a doctor all that money to do it for him. haha.. You wouldn't
do that because you KNOW you don't understand medicine and childbirt.
You DON'T know about markets or how they work - but you believe you
do, so you make foolish decisions - and would rather blame the markets
than yourself.
> with the same risks and payoffs, and the same fundamental
> uncertainty. The fact that people do it in business suits doesn't change
> anything.
Again, you are responsible for what happens to you not some evil
marketplace. Look, people in need could pick up a club and hit people
over the head and take their money - most do not. Why? Because its
wrong first. And because people organize to stop such behavior.
Why? Because it subtracts value from society. If more than a small
handful of people clubbed each other over the head on a regular basis
- society would fall apart.
But a large percentage, the largest, of our ceconomic activity is
engaged in markets. Why? Because markets CREATE VALUE - just like
making donuts create value. And the give and take of a free market
allow people the give and take to fairly apportion the value that is
created by the market.
> > You are more interested in protecting your ill concieved ideas of value -
> > even though they fly in the face of market realities.
>
> I'm more interested in not making the same mistake twice.
Right, obviously someone as ill educate on this subject as you needs
to stay away from the market until you educate yourself. That
education will not occur unless and until you take responsibility for
your decisions and learn from them without blame or abuse.
> > As I said before, you have said so many ignorant things that are so
> > fundamentally flawed, it is difficult for us to have a useful and
> > intelligent conversation on this subject.
>
> As I've said before, personal attacks
I'm not attacking you I'm speaking the obvious. You ARE ignorant -
that's why I'm taking an inordinate amount of time to explain things
in a way that penetrates the shroud if ignorance you wear proudly
around you- so you can understand just where you got it wrong.
> are the last resort of someone who has
> no other cogent argument to support his position.
Well, they're not personal attacks - you choose to see them as such
because it allows you to project responsibility away from you again so
you don't really have to address your ignorance on this subject.
Willie...@gmail.com
>
> - Show quoted text -
People can believe the market can go down and short a stock as well.
People can believe lots of things. But this doesn't change the value
the market creates.
A simple example to consider are three farmers that live in a valley
where baseball is popular. :A herdsman makes three baseballs from
calfskin. A woodsman makes 3 bats. A pig farmer makes 3 gloves.
None of them can play ball. But at the annual festival in the valley,
they go to trade their wares. And the woodsman trades 2 of his bats
for a ball and glove. The pig farmer, two gloves for a ball and bat.
The herdsman, two balls for a glove and bat.
Now, these trades take place irrespective of the value of the stuff in
the ball bat or glove, or the labor or knowledge required in each.
They take place because regardless of those fundamentals, ALL are
wealthier after the trade takes place.
Why?
Because before the trade, NONE could play ball
After the trade ALL could play ball.
So, even though the number of balls, bats and gloves in the valley
were the same before and after the trade - and even though there was
considerable cost in arranging the festival so the trade could take
place - everyone is better off after the trade.
And this value was created BY the trades themselves.
Now in a more sophisticated way, and a more complex way, ALL trading
shares this feature.
Mxsmanic
> The piece of paper that gives you the right to take delivery of a
> commodity is very similar to a piece of paper that gives you the right
> to a portion of the profits of a corporation for the term of its
> existence.
The latter doesn't usually exist. Having stock in a corporation gives you a
right to receive dividends ... if the management of the corporation declares a
dividend. Some don't.
> I don't know what you mean by 'intrinsic value'
I agree.
> I suspect you don't either.
Intrinsic value is the possibility of productive use, as opposed to having
value only when sold. For example, you can grow crops on land in build a
house on land, and you can cook and eat pork bellies. Thus, they have
intrinsic value--their value does not depend on finding someone willing to buy
them.
> What is true is that the future cannot be predicted, with precision
> and so there is a natural tendency for markets to create vehicles
> whereby any risks associated with this inabilty or inefficiency are
> mitigated.
The future cannot be predicted; therefore this is gambling.
> For ecample, Sam, a donut shop can have a book
> value - the value of the ovens, the mixers, the cash register, the
> coffee makers, the buildings, the land, the parking lot - these might
> be $380,000.
Yes, but that has nothing at all to do with stock.
> Markets exist because uncertainty exist and when that uncertainty
> affects the value of doing business, markets arise to mitigate that
> uncertainty.
Casinos exist because uncertainty exists. Securities markets are casinos,
because they deal in uncertainty and valueless items. Supermarkets, however,
are not gambling venues.
> YOU may have speculated wildly and lost your shirt.
No, others did that and I lost my shirt.
> Clearly, you lost your shirt and you prefer to blame the market rather
> than yourself.
There was nothing I could have done.
> Obviously you are blinding yourself and creating this drama about
> markets because a) you don't understand how markets really work, and
> b) you don't want to take responsibility for your actions.
When the market bankrupts you, you may feel differently. I know it's hard to
believe if you've been lucky thus far.
> You are ranting on and on and on - getting more agitated.
I'm not agitated at all.
> There are
> two kinds of people in this world. Those that make things happen.
> Those that have things happen to them. Your locus of control is
> outside yourself. So, you are a perpetual victim. So, you are
> informed by a world view that makes you the victim. In your mind its
> better being a victim than being a patsy or a fool. But none of this
> has anything to do with the reality of markets or the reality of our
> ability to use markets to build a Mach 3 super-concorde.
Which self-help book did you find this in?
> People often confuse crooks with business folk.
People often don't realize that business folk are frequently crooks.
> So, folks who trade in stock and commodity exchanges are providing a
> service to those who create the stock and the commodity- by making
> their activities more liquid for one - and diversifying risks another
> - and more benefit besides.
But it's all worthless paper. Great amounts of money are being diverted to
fundamentally counterproductive activities. A few get rich, and everyone else
gets poor.
> As in the case above, Sam's stock can rise and fall depending on what
> Sam does in response to what life offers him.
Sam's stock is worthless unless he can find the (potentially elusive) "greater
fool" who will pay for it.
> At the very least is the net present value of all that company's
> future earnings.
Since the future cannot be predicted, this is imaginary, and it's gambling.
> In the real world lots of things can happen - but with a little luck,
> a lot of hard work, and intelligence and care - value can be created
> by people working together - and markets reflect that reality.
If it requires luck, it's gambling.
> It depends on how people regard it.
Of course. The problem is that people are very emotional and change their
minds constantly. What seems valuable today may be worthless tomorrow. This
can even happen with cash, although it rarely does. It happens much more
frequently with paper instruments like stocks and bonds.
> These things ARE worthless peices of
> paper if everyone regards them that way. But to the extent they are
> accepted at legitimate symbols to be taken seriously, they represent
> fundamental value and wealth.
Assuming that they will be so regarded is risky.
> Wealth is created by people doing things for one another. Markets are
> a way they may do that and share equitably in the wealth that they
> both create.
Nobody does anything for anyone in a stock market. It's just shifting money
around, in exchange for worthless paper.
> FOR YOU who didn't take the time and trouble to understand the
> fundamentals.
For everyone. If you feel otherwise, you've simply been lucky. Don't risk
anything you can't afford to lose.
> I'm not attacking you I'm speaking the obvious.
You're engaging in personal attacks; you've run out of arguments.
Mxsmanic
> As long as the company has any value, how can you say the shares are
> "worthless"?
Because their worth has no connection to the value of the company. Shares are
worth only what someone is willing to pay for them, irrespective of the worth
of the company that issued them. This is what a lot of people don't
understand, and it gets them into trouble.
Willie...@gmail.com
> Willie.Moo...@gmail.com writes:
> > The piece of paper that gives you the right to take delivery of a
> > commodity is very similar to a piece of paper that gives you the right
> > to a portion of the profits of a corporation for the term of its
> > existence.
>
> The latter doesn't usually exist. Having stock in a corporation gives you a
> right to receive dividends ... if the management of the corporation declares a
> dividend. Some don't.
>
> > I don't know what you mean by 'intrinsic value'
>
> I agree.
You don't understand what i'm saying, so I doubt you understand what
you are saying now. So, I will explain it to you son. Your usage of
the term 'intrinsic value' does not comport with my usage of the term,
or a dictionary definition. So, when YOU use it, it doesn't make any
sense. Therefore, it doesn't make any sense to me. Now, in a simple
trick of wordplay, you try to impune my intelligence by recasting this
simple statement about your obvious lack of understanding into some
sort of indictment of me. haha.. It won't work. Your lack of
knowledge, and clear and concise usage of terms is obvious to all - no
matter what word games you try to play.
>
> > I suspect you don't either.
>
> Intrinsic value is the possibility of productive use, as opposed to having
> value only when sold.
So, because you can take physical delivery of the commodity that
creates intrinsic value according to you.
That's stupid because in many instances, actually taking physical
delivery incurs costs far in excess of what you paid - creating
negative value..
The productive value - as you are now calling (as opposed to intrinsic
value which you wrongly claim to be defining) - depends on who uses it
and what its used for.
Think about it man. A trading lot of pork bellies is 40,000 pounds on
the CME. FORTY THOUSAND POINDS - that's a train car load of meat!!!
That much bacon is of very limited value to most people. Even you.
What would you or me or anyone do with 40,000 pounds of pork belly
meats showing up at your house?
We couldn't even give it away because it wouldn't be properly cut,
packaged, aged, dresse... haha...
It would rot and become a public health hazard. It would actually
have a negative productive value for you and most people..
Now, if you were set up like Hormel or any number of other meat
processors to make efficient use of those meats, then they'd have
tremendous productive use.
But only if you had relationships with buyers across the country to
take delivery of say 20,000 two pound packs of meat in a few days of
receiving it. Because pork bellies like any other food, has a shelf
life, and people won't buy the food if its too old, and in fact you
cannot legally sell them, if you do not sell them in a certain period
of time according to certain laws.
And besides, unless you have the appropriate permits and places to do
the work,approved by inspectors and so forth or contract with someone
who does, you cannot legally unpack the meat cut it and repack it in
more saleable sizes even if you had the buyers. And no buyer who had
to answer to a health inspector and insurance company themselves would
touch your meat.
So, cleearly you are confused. Plainly you don't understand what
you're talking about. Obviously you haven't thought through clearly
what you are sayinjg.
Pork bellies can be eaten if properly prepared. In your mind that
gives them 'something you call intrinsic value. Bacon for example is
one such item that is made from pork bellies if properly dressed.
That is a clear understandable use for pork bellies and so in your
mind that has intrinsic value.
So? The value the ability to eat pork bellies creates depends on your
situation and abilities, just like anything you buy and sell.
Stock cannot be eaten. This is also true. And in your mind that makes
it valuless. But the dividends a company pays its shareholders
periodically from its quarterly profits, can be taken to the bank,
and cashed in, and used to buy breakfast at a restaurant where pork
bellies products are served.
The value of those divedends are easier calculate and cash in for
folks like us than the value of the pork bellies you buy for
consumption - and not trading - which is what you said at the
outset.
That is you can buy a stock to hold it for dividends rather than
appreciation - and not trade it. Just like you can buy pork bellies
for physical delivery. But whereas its a simple matter of going to
the bank to cash your divident checks, its not so simple to realize
value from physical delivery of 100 trading lots (4,000,000 pounds) of
portk bellies.
It is far easier to get value from holding a stock and collecting
dividends than it is to get value from taking physical delivery of
commodities.
So, by your own definition, of 'intrinsic value' - which is not my
definition by the way - you have proven that stocks that pay a regular
dividend which are held have greater intrinsic value than any
commodity you might buy.
So, you are really rather confused. as I pointed out at the outset.
The utility of somethng varies with your skill, your assets, and your
situation -
> For example, you can grow crops on land in build a
> house on land, and you can cook and eat pork bellies.
The value of land to one person can be quite different than the value
of the same land to someone else. That's why I used it in the example
of the donut shop owner and the gas station owner. Many things enter
into the value of something to someone - and they're not 'intrinsic'
if you're talking cash.
Value has many usages, since we're talking about markets, a reasonable
assumption is that you are talking about a price for something
established by the market.
Intrinsic too has many usages, but I would say that you are speaking
of the essential nature of a thing by its constitution.
So, one may talk about the intrinsic worth of a gem for example. Gems
are very valuable due to their portability, scarcity, size,
desireablilty. So, they always have great WORTH, Their value on any
given day, on a diamond exchange, VARIES - depending on supply and
demand and other factors - despite their great intrinsic worth.
Now you would have us all believe that 40,000 pounds of pork bellies
have an intrinsic worth. I would argue they do not. In fact, the
value of pork bellies on the mercantile exchange in Chicago is highly
dependent on the economic conditions of the meat processors located in
and around that city. And when you look at the underlying value of
the pork belly market in Chicago and contrast it with the enterprise
value of all the meat processors that benefit from public trading of
this commodity, you can see the role the pork belly market plays to
diversify risks associated with handling this commodity which after
all can spoil.
In fact, intrinsic worh, applies to things that are intrinsically held
in high regard by all humans - and rarely applies to things that
appear in the market. My daughter has high intrinsic worth to me -
something so valuable I wouldn't even consider putting a value on
it.
To prove my point that you CANNOT make efficient use of commodities, I
will buy ONE contract of pork bellies and have it delivered to your
house if you agree to two things.
(1) attempt to butcher them and dress them and age the shipment
yourself so they may be eaten, and then cook them and eat them
yourself before they rot (you can invite any number of friends over to
help if you like - so long as they are not contracted butchers and
meat packers - true neighbors and friends with no connection to the
meat industry);
(2) agree to let me film the proceedings and broadcast it as I see
fit.
Then, we can see. If you can make use of 40,000 pounds of pork
bellies without wasting say 20% of the stuff, then I will agree with
you. If you cannot then you must admit that you don't know what the
hell you are talking about.
> Thus, they have
> intrinsic value--their value does not depend on finding someone willing to buy
> them.
>
The value you have in taking delivery of 40,000 pounds of pork bellies
is very much dependent on you finding someone who knows what to do
with it, and is willing to take delivery of them. No person could eat
40,000 pounds of pork bellies - including the skin and hair and so
forth - in theirlifetime. Sorry.
So, by your own deifnition - this particular commodity - has no
intrinsic value to you.
> > What is true is that the future cannot be predicted, with precision
> > and so there is a natural tendency for markets to create vehicles
> > whereby any risks associated with this inabilty or inefficiency are
> > mitigated.
>
> The future cannot be predicted; therefore this is gambling.
This is a naive view. That is kind. It is wrong and reflects a deep
seated ignorance. That you don't understand even that you ARE
ignorant on this subject marks you as stupid. I'm not attacking you,
I am merely pointing out the obvious.
So, let me try to educate you.
The future cannot be predicted but people can benefit no matter what
happens in the future, if they are clever, depending on their
situation.
A baker and a grain farmer are on opposite sides of a transaction.
The more the grain farmer gets for his grain, the less profit the
baker sees. the less the grain farmer gets for his grain, the more
profit the baker sees. Both would like to plan for the future, so
they can run an efficient business. Neither can predict the weather
or the crop yeild with absolute certainty. They can take opposite
positions on futures contracts to benefit them both however. They
both pay a premium for this to the market, the traders who take the
risk and earn a profit. But this is less like gambling (where every
dollar bet comes from the gamblers, minus the house take) and more
like an insurance premium against uncertainty (where a small fee is
paid to assure that prices and hence the profits of both are within a
narrow range)
Understand the difference in blowing your money in a gambling parlor
and paying an insurance premium - both of which involve uncertainty -
and you have taken a step toward understanding one value of the
commodity market.
>
> > For ecample, Sam, a donut shop can have a book
> > value - the value of the ovens, the mixers, the cash register, the
> > coffee makers, the buildings, the land, the parking lot - these might
> > be $380,000.
>
> Yes, but that has nothing at all to do with stock.
We're dealing with your ignorance surrounding your misuse of the term
'intrinsic value' - we haven't gotten to stock yet. Lets get the
basics straight and then we can move to more advanced subjects.
> > Markets exist because uncertainty exist and when that uncertainty
> > affects the value of doing business, markets arise to mitigate that
> > uncertainty.
>
> Casinos exist because uncertainty exists.
Casinos are built by Casino owners to take money out of gamblers
pockets and put it in their own. Lotteries are taxes on the stupid -
according to Milton Friedman, and I tend to agree with him.
This is distinctly different than paying an insurance premium - which
is used to mitigate uncertainty and provide a meausre of stability for
folks.
> Securities markets are casinos,
No they are not. I have given you simple examples, examples that you
might have a chance of understanding given your extremely limited
knowledge on this subject. You are more interested in defending the
notion that you are right, rather than learning from them. The
example of the baseball enthusiasts who trade their baseball gear to
increase value is an excellent example. The example of a farmer and a
baker agreeing to take opposite sides of a futures contract as a way
to create an assurance that both will have expected profits regardless
of the weather - and the profits the traders make as a group - can be
considered the premium. These are all valid and important things to
understand -and to understand why markets are tolerated while gambling
and theivery are not.
> because they deal in uncertainty and valueless items.
Casinos fix the odds to make sure that games of chance benefit the
house always. Insurance companies keep detailed actuarial data on car
crashes, medical problems, fires, earthquakes, you name it, so they
may cover losses for an efficient premium and earn a reasonable profit
doing so. Retailers buy products they think people will buy and make
a reasonable profit doing so, despite the uncertainty. Commodities
exchanges buy and sell contracts that benefit the makers of those
contracts in much the way insurance premiums benefit the makers of
those contracts and for much the same reason. Stock exchanges buy and
sell positions in a company that benefit the traders as well as the
makers of the stock - in much the same as commodity makers with
different benefits.
All of these activities have a clear measureable uncertainty
surrounding them. Only Casinos fail to provide measurable value to
the population of gamblers they work with. In all other cases, BOTH
parties benefit in the other cases - in clear definable ways. The
most lotteries and casinos can offer is - odds are you'll have fun!
haha.. And as Rodney Carrington says in one of his acts, I pretty
much got screwed on that deal! haha...
No markets create value - which is why they're an important part in a
free society. Casinos do not - that's why they're part of the
entertainment business. You buy a lottery ticket or sit at a roulette
wheel in Vegas, for how it makes you feel. Knowledgeable folks who
make their living in the market every day go to work and actually
create tremendous value from their activity, and gather some of that
value - because they know what they do and how to do it.
You would rather not believe these things are true because - as you
have reported here yourself - you lost your shirt. And its obvious
when you take your woeful lack of appreciation and knowledge together
with this fact you have admitted, that you are merely trying to prove
that you are right, and its the market's fault,rather than take
responsibility and learn from your mistake.
. .
>Supermarkets, however,
> are not gambling venues.
>
Yet even there there is uncertainty., How much bacon to buy from the
meat packer? Too little and the shelves are empty and people go
elsewhere and might not come back. Too much and you throw away rotten
bacon at the end ot the quarter.
Even if you buy and sell stuff that has a longer shelf life you are
taking risks as a retailer. A friend of mine who owns dress shop
chain puts it this way. If one store sells a red dress and a blue
dress. Another a red dress and a green dress. Another a red dress
and a yellow dress. NONE know the red dresses are hot. NONE know the
brown dresses are dogs. But if you combine the STATISTICS from
various stores - you can know THAT DAY - to raise the price on the red
dresses and reorder them. Put the brown dresses on the discount rack,
and cancel the orders for them. By doing this, you can triple your
throughput and profits as a retailer. That's why chains like Walmart,
and The Limited have great advantage over mom and pop stores. This is
the value of understanding the statistics of what's going on in your
inventory - and why you have computer based cash registers -
United States Patent 4,903,200
Mook, Jr. February 20, 1990
--------------------------------------------------------------------------------
Point of sale apparatus
Abstract
Point of sale apparatus wherein a general purpose computer is utilized
in emulating the functions of an integrated POS system. A general
purpose computer is employed with a cash register specific keyboard to
provide a broad range of computational and data handling capabilities
for the apparatus. To perform in conjunction with the general purpose
computer for its general computing function, a typewriter-type
keyboard is employed with the apparatus. A prioritized protocol is
developed between the two keyboard functions giving operational
priority to the latter keyboard. To achieve a necessary reaction to
cash register keying operations, a device driver program is positioned
at a high priority level in the BIOS area of memory of the general
computer to develop a vector interrupt deriving a jump address
approach to the execution of cash register key function commands.
> > YOU may have speculated wildly and lost your shirt.
>
> No, others did that and I lost my shirt.
You entered some sort of contract that spelled out that was to be
done. You signed it and wrote the check. You are responsible.
Accept that and you can begin to learn from your mistakes.
> > Clearly, you lost your shirt and you prefer to blame the market rather
> > than yourself.
>
> There was nothing I could have done.
The cry of the perpetual victim. This is absolute nonsense. You
wrote the check you signed the contracts. You did so without clear
understanding. YOU are reponsible - not the market..
> > Obviously you are blinding yourself and creating this drama about
> > markets because a) you don't understand how markets really work, and
> > b) you don't want to take responsibility for your actions.
>
> When the market bankrupts you, you may feel differently. I know it's hard to
> believe if you've been lucky thus far.
Luck has little to do with success or failure. Those that would
prefer not to take responsibility fo rtheir lives, speak differently.
It doesn't make them right, or what they say useful - even to
themselves.
>
> > You are ranting on and on and on - getting more agitated.
>
> I'm not agitated at all.
Whenever anyone says to me they lost their shirt and then rants on and
on saying more and more outlandish things - to me that makes them seem
agitate to me.
> > There are
> > two kinds of people in this world. Those that make things happen.
> > Those that have things happen to them. Your locus of control is
> > outside yourself. So, you are a perpetual victim. So, you are
> > informed by a world view that makes you the victim. In your mind its
> > better being a victim than being a patsy or a fool. But none of this
> > has anything to do with the reality of markets or the reality of our
> > ability to use markets to build a Mach 3 super-concorde.
>
> Which self-help book did you find this in?
Life experience son.
> > People often confuse crooks with business folk.
>
> People often don't realize that business folk are frequently crooks.
People who think they have been bamboozled by crooks don't want to
take responsibility for their actions - or inactions - or blind greed
on their part that enabled the loss in the first place.
> > So, folks who trade in stock and commodity exchanges are providing a
> > service to those who create the stock and the commodity- by making
> > their activities more liquid for one - and diversifying risks another
> > - and more benefit besides.
>
> But it's all worthless paper.
No its not. An insurance contract is paper - but its far from
worthless, even if you keep up the premium payments and never make a
claim.
> Great amounts of money are being diverted to
> fundamentally counterproductive activities.
If markets were counterproductive they would be part of the
entertainment business not an essential part of ALL business. Life is
full of uncertainty, and where that uncertainty has real impact on
real businesses, there is a potential to create a market to diversify
that risk away for some small premium paid by the makers of the market
to the traders who benefit from the market.
> A few get rich, and everyone else
> gets poor.
As in my story which you elided, the few who get rich get rich because
they create that wealth for themselves - through hard work,
understanding, and care. Those who remain poor either are lazy, don't
educate themselves, or don't care to know how what they do impacts
others.
Your locus of control can be inside or outside. Children tend to have
their locus of control outside. Adults tend to have it inside. You
speak as a child might speak about what was done to them by those
crooked bastards who stole your lunch money. GROW UP! Take
responsibility for your situation and do something about it. And quit
blaming honest hardworking people who create the value they enjoy.
> > As in the case above, Sam's stock can rise and fall depending on what
> > Sam does in response to what life offers him.
>
> Sam's stock is worthless unless he can find the (potentially elusive) "greater
> fool" who will pay for it.
You have deleted the story and then made misleading comments about
it. Shame on you. Fact is, Sam through his intelligence, work and
care, created tremendous value for himself, while Fred, who took the
money and ran, felt cheated by Sam's success. Meanwhile, folks that
helped Sam along the way, Billy, Julie, Sally, enjoyed a measure of
Sam's success because they were essential to CREATING the wealth Sam
enjoyed. The Oil company that bought out Sam benefitted more than
Sam. They increases their total sales by 20% - which is far more than
the $100 million Sam agreed to - but Sam benefitted as well, because
$100 million is more than he could have ever made alone without his
strategic partner.
WEALTH IS CREATED BY APPRORIATE CONTRACTS ENTERED INTO BY
KNOWLEDGEABLE AND FREE PEOPLE. That's why we have contracts. They
are a source of great wealth - providing both parties are
knowledgeable,and free.
> > At the very least is the net present value of all that company's
> > future earnings.
>
> Since the future cannot be predicted, this is imaginary, and it's gambling.
You are being pedantic just to avoid the obvious. The future dividend
of GE, or the future earnings of a chalet that's rented during the
season in the Rhone valley, is better known than the quality or shelf
life of 40,000 pounds of pork bellies. I mean, lets look at a Chalet
in the Rhone Valley of Switzerland. You buy it for $8 million and
Swiss property values have NEVER gone down appreciably over the past
1000 years. They appreciate at 4% to 5% per year forever. The
benefit of being totally isolated from the world, and never getting
involved in wars and whatnot. This five room chalet earns $800,000
per season - with rents rising 5% per season - so, we're talking about
$8,000 per week per room.. on season. And its open the rest of the
season. Now, I can create a limite liability company with 5 friends of
mine to buy $1.6 million share of the chalet, and stay there off
season - and collect $160,000 per year - year in and year out. And in
7 years I might want to sell my share for $3.2 million - This is
prefectly predictable - more preictable than the quality and shelf
life of any particular 40,000 pound trainload of pork bellies.
> > In the real world lots of things can happen - but with a little luck,
> > a lot of hard work, and intelligence and care - value can be created
> > by people working together - and markets reflect that reality.
>
> If it requires luck, it's gambling.
You are being churlish. Operating a casino is not the same as running
an insurance company or taking market risk. Buying into a hand at a
casino is not the same as buying insurance for your car, or a share in
a Swiss Chalet.
I've demosntrated that and you are refusing to see it.
.
> > It depends on how people regard it.
>
> Of course. The problem is that people are very emotional and change their
> minds constantly.
You are missing my point.
Go back to the grain farmer and bakery. They are on opposite sides of
the same transaction. They necessarily regard a futures contract
oppositely. So, they are BOTH AHEAD by making the RATIONAL decision
to enter into opposite sides of a futures contract - since by doing so
UNCERTAINTY IS REDUCED. They pay for this of course, they pay the
traders to take the risk for them. But like the insurance premium you
pay for your car, its worth it to everyone concerned.
> What seems valuable today may be worthless tomorrow.
Spoken as a person who is profoundly ignorant of the market.
> This
> can even happen with cash, although it rarely does.
At the end of the Vietnam war, when the excessive spending of the US
government came home to roost, the value of the US dollar plummeted.
We were on the gold standard at that time, and as a result, France
started buying up as much gold as it could get for $35 per ounce.
Nixon put a halt to that, which caused a huge deflation in the US
dollar. This got the Saudi's shorts in a bunch because all their oil
contracts were denominated in dollars. So, they got together and
stopped selling oil to the US oil companies until they renegotiated
the contracts. The availability of oil diminished in the US as it
flowed to those more able to pay - with currency that wasn't
marginalized by excessive spending. Meanwhile, prices skyrocketed for
energy. Then, other prices rose as price increases for energy rippled
through the markets. Sugar, which takes a lot of energy to make, was
hard hit, and the price of a candy bar tripled. Meanwhile people
purchased fewer cars, and drove cars less due to higher prices. This
had an adverse effect on American auto makers and their suppliers.
The Japanese who already made small cars started shipping them to the
US market to take advantage of the increased demand. They couldn't
get parts suppliers and repair folks to support their product, so they
redesigned their US export cars to be supremely reliable. This was
the beginning of the end to the US auto business. Japan with 200
million people has 9 major auto makers. The US with 300 million
people has 3 major auto makers.
The value of paper, of any paper, hs to do with what it represents
relative to the fundamental things that are going on in the economy.
The US got involved in Vietnam and spent something like $200 billion
per year - these are 1960s dollars, this is more like $4 trillion
today - in a very short time. We got away with it in the short term-
but all those dollars came back - and deflated the value of the
currency. More dollars chasing the same amount of goods. And this
was reflected in the value of commodities like gold and oil. Now the
President could remove gold from the market - because it didn't have
such a big impact on our economy But he removes other commoditiies
from the market at great peril to the US economy. Controlling the
prices of gasoline for example merely led to shortage. There was no
solution but to pay the price the real price of that commodity with
deflated dollars.
The same is about to happen again with our current President. He
unilaterally got us involved in a war in Afghanistan and a war in Iraq
and is saber rattling around Syriia and Iran and even North Korea. If
the costs were borne equally among all our trading partners, this
wouldn't be so bad. But we're doing it all alone. And like Vietnam,
were going to pay a terrible price for spending $65 billion per month
more than we have the means to produce... to sustain these
conflicts.
I have a daughter who lives in Switzerland. I send her money. I
could see the value of the dollar plummet as we expanded our
unilateral war on terror. A swiss franc was $0.65 a few years ago,
and its now $0.85 - so this is another reason I got involved in the
chalet deal.
> It happens much more
> frequently with paper instruments like stocks and bonds.
What you fail to realize is that values received by the buying and
selling of stock reflect underlying values created by the companies
and the transactions among traders.
> > These things ARE worthless peices of
> > paper if everyone regards them that way. But to the extent they are
> > accepted at legitimate symbols to be taken seriously, they represent
> > fundamental value and wealth.
>
> Assuming that they will be so regarded is risky.
That depends on the details. In a nation like Switzerland that has
NEVER involved itself in warfare or become dependent on any single
source of supply outside itself, and filled with people who appreciate
and respect markets, with a strong banking system and strong economy -
the Swiss Franc is pretty damn stable - for such a small nation. A
nation like Indonesia, which is at the center of conflicting regions
and has a weak government and a people who do not have a strong market
or banking tradition - the Indonesian currency fluctuates wildly
against the dollar or the Franc.
The US is a special case, because of its size. 4.38% of the worlds
population control over 25% of the world resources. There are
something like a trillion dollars worth of US bank notes in
circulation, compared to $300 billion worth of Euiros, the next
largest curency... backed by 400 million people who control something
like 8% of the world's resources.
But even the US - as was shown during the aftermath of the Vietnam
war, can get into trouble financially and that is reflected by the
value of its currency.
Another reason to buy Swiss real-estate. Of curse foreigners cannot
buy Swiss real-estate easily. Especially for rental. But since my
daughter was born in Switzerland and her mom is Swiss, well, I have
residency. Which is pretty lucky I think I can provide for my
daughter and retirement with a pretty solid investment that increases
5% per year - in real terms, no matter what the Euro or Dollar are
doing over the next 10 to 20 years.
> > Wealth is created by people doing things for one another. Markets are
> > a way they may do that and share equitably in the wealth that they
> > both create.
>
> Nobody does anything for anyone in a stock market.
Yes they do. They both benefit, otherwise the transaction wouldn't
take place.
> It's just shifting money
> around,
You say foolish things like this and wonder why I call you a fool.
> in exchange for worthless paper.
I'm sure that a 3 year old watching his dad pay the insurance premium
for the family car and pay the note on that same car, and the monthly
bill for the gas purchases thinks the same thing. The father knows
better. In each case both the Father and the parties he writes checks
to are better off after he writes the checks than before.
> > FOR YOU who didn't take the time and trouble to understand the
> > fundamentals.
>
> For everyone.
If that were true people would organize and close down the stock
markets the way they organize and close down crack houses. THEY DON'T
because everyone benefits - except those who approach the
opportunities presented with a lazy and greedy ignorance that marks
them off as sheep to be slaughtered.
> If you feel otherwise, you've simply been lucky.
Luck favors those who are prepared.
> Don't risk
> anything you can't afford to lose.
That is true in any endeavour you engage in.
> > I'm not attacking you I'm speaking the obvious.
>
> You're engaging in personal attacks; you've run out of arguments.
No not at all. YOU are the one who made it personal when you said you
lost your shirt and were taken advantage of. I am merely responding
to your admission of what went on with you. Your ignorance is obvious
to all. Your failure ditto. Merely pointing out that you are an
ignorant fool in light of these facts is not a personal attack at
all. Note that I have been trying to carefully and patiently educate
you on all the matters you bring up and to continually point out your
errors withotu judgement or rancor. YOU are the one who prefers to
see my statements as an attack because it allows you to maintain the
fiction in your own mind that you are blameless and everyone else is
at fault.
Mxsmanic
> So, because you can take physical delivery of the commodity that
> creates intrinsic value according to you.
No, many things have intrinsic value whether or not you can "take delivery."
Land isn't delivered, but it has intrinsic value.
> That's stupid because in many instances, actually taking physical
> delivery incurs costs far in excess of what you paid - creating
> negative value..
In many instances, it costs nothing, or nearly so. Land doesn't have to be
delivered. A product formula can be e-mailed. Licenses for IP can be
conveyed in the same way.
> The productive value - as you are now calling (as opposed to intrinsic
> value which you wrongly claim to be defining) - depends on who uses it
> and what its used for.
The important fact is that it can be used productively. It has value that
does not depend on anyone's willingness to buy it again.
> Think about it man. A trading lot of pork bellies is 40,000 pounds on
> the CME. FORTY THOUSAND POINDS - that's a train car load of meat!!!
Yes. It can feed a lot of people. You can't feed anyone with stock
certificates.
> That much bacon is of very limited value to most people. Even you.
It's valuable to people who are hungry, and it remains so irrespective of any
speculation.
> What would you or me or anyone do with 40,000 pounds of pork belly
> meats showing up at your house?
Cook it and sell meals to people who are hungry.
> Now, if you were set up like Hormel or any number of other meat
> processors to make efficient use of those meats, then they'd have
> tremendous productive use.
Yes, because they have intrinsic value. But Hormel couldn't make anything to
eat out of stock certificates.
> So, cleearly you are confused.
Nope, I see things as they are, not as I might want to see them.
> Pork bellies can be eaten if properly prepared. In your mind that
> gives them 'something you call intrinsic value.
Yes. I don't know of any way to eat banknotes or stock certificates, and they
make poor wallpaper.
> Stock cannot be eaten. This is also true. And in your mind that makes
> it valuless.
Yes.
> But the dividends a company pays its shareholders
> periodically from its quarterly profits, can be taken to the bank,
> and cashed in, and used to buy breakfast at a restaurant where pork
> bellies products are served.
There is no guarantee that you will receive dividends. There is no guarantee
that they will be of any specific amount or be declared at any given time.
It's pure speculation--gambling.
> That is you can buy a stock to hold it for dividends rather than
> appreciation - and not trade it.
But many people don't do that. They prefer to gamble and speculate even more
by buying and selling.
> It is far easier to get value from holding a stock and collecting
> dividends than it is to get value from taking physical delivery of
> commodities.
Making money without gambling is always more difficult than rolling the dice.
That's why so many people are attracted to the latter: the lure of something
for nothing is very strong, despite the risk.
> The value of land to one person can be quite different than the value
> of the same land to someone else.
Land has value independent of anyone's evaluation. It can be simply used as
land, even if everyone thinks it's worthless. That's why it has intrinsic
value. You don't need anyone to consider your land valuable in order to
cultivate it or live on it.
> So, one may talk about the intrinsic worth of a gem for example.
Most gems have little or no intrinsic value. They are rocks, and there isn't
much you can do with a rock.
> The value you have in taking delivery of 40,000 pounds of pork bellies
> is very much dependent on you finding someone who knows what to do
> with it, and is willing to take delivery of them. No person could eat
> 40,000 pounds of pork bellies - including the skin and hair and so
> forth - in theirlifetime. Sorry.
Why are you preoccupied with 40,000 pounds? I suppose a trillion acres of
land is more than most people could use, too. However, that doesn't change
the fact that both pork bellies and land have an intrinsic value that is
wholly independent of anyone's willingness to pay for them. You don't have to
sell them in order for them to have value--that's the key.
> This is a naive view. That is kind.
It's a hard fact, and people who don't acknowledge it are putting themselves
at considerable risk.
> It is wrong and reflects a deep
> seated ignorance. That you don't understand even that you ARE
> ignorant on this subject marks you as stupid. I'm not attacking you,
> I am merely pointing out the obvious.
No, you're merely losing the debate.
> We're dealing with your ignorance surrounding your misuse of the term
> 'intrinsic value' - we haven't gotten to stock yet.
You're dealing with personal attacks, but I won't address those, so the
conversation will be rather one-sided unless and until you return to the topic
of the thread.
> No markets create value - which is why they're an important part in a
> free society.
This statement contradicts itself. It is true that markets do not create
value. Trading a share of stock 1000 times does not make it more valuable.
> You entered some sort of contract that spelled out that was to be
> done. You signed it and wrote the check. You are responsible.
I didn't write any checks. I did not sign any contracts.
> The cry of the perpetual victim. This is absolute nonsense. You
> wrote the check you signed the contracts. You did so without clear
> understanding. YOU are reponsible - not the market..
See above.
> Luck has little to do with success or failure.
It does when you depend on chance to make you wealthy.
If you want a reliable source of money, you have to earn it, not play with it.
> Whenever anyone says to me they lost their shirt and then rants on and
> on saying more and more outlandish things - to me that makes them seem
> agitate to me.
The way things seem to you may not be the way they actually are. It's
important to understand that.
> No its not. An insurance contract is paper - but its far from
> worthless, even if you keep up the premium payments and never make a
> claim.
You can enforce a contract by going to court. You cannot force someone to buy
stock from you by going to court. Gambling debts are uncollectible.
> If markets were counterproductive they would be part of the
> entertainment business not an essential part of ALL business.
They _are_ a form of entertainment, for those who wish to gamble in a
"respectable" way.
> As in my story which you elided, the few who get rich get rich because
> they create that wealth for themselves - through hard work,
> understanding, and care.
Not on the stock market. The stock market does not create wealth, it
redistributes it ... often making a handful of people very rich while making
many other people slightly poorer.
> And quit blaming honest hardworking people who create the value they enjoy.
I haven't blamed any hard workers. I was talking about people who play the
stock market.
> WEALTH IS CREATED BY APPRORIATE CONTRACTS ENTERED INTO BY
> KNOWLEDGEABLE AND FREE PEOPLE. That's why we have contracts.
Wealth is created by productive work. Contracts do not create wealth, as they
are not productive work (except for the lawyer who drafts them). Shifting
money around does not create wealth. At some point, someone has to do
something productive to back up all the paper.
> You are being pedantic just to avoid the obvious. The future dividend
> of GE, or the future earnings of a chalet that's rented during the
> season in the Rhone valley, is better known than the quality or shelf
> life of 40,000 pounds of pork bellies.
Some companies pay no dividends, and nothing forces them to do so.
> You are being churlish.
I'm being realistic.
> Spoken as a person who is profoundly ignorant of the market.
Famous last words.
> The same is about to happen again with our current President. He
> unilaterally got us involved in a war in Afghanistan and a war in Iraq
> and is saber rattling around Syriia and Iran and even North Korea. If
> the costs were borne equally among all our trading partners, this
> wouldn't be so bad. But we're doing it all alone. And like Vietnam,
> were going to pay a terrible price for spending $65 billion per month
> more than we have the means to produce... to sustain these
> conflicts.
People who own their land unencumbered will still be able to till it and eat.
Those who own only paper will be in for some hard times.
> What you fail to realize is that values received by the buying and
> selling of stock reflect underlying values created by the companies
> and the transactions among traders.
There's no connection between the two. The stock market is a soap opera, an
illusory source of nonexistent wealth that operates on emotion alone.
> That depends on the details.
It depends on the whims and caprices of a large population, which is to say
that it is essentially random.
> In a nation like Switzerland that has
> NEVER involved itself in warfare or become dependent on any single
> source of supply outside itself, and filled with people who appreciate
> and respect markets, with a strong banking system and strong economy -
> the Swiss Franc is pretty damn stable - for such a small nation.
How many people play the stock market in Switzerland?
TMOliver
"Mxsmanic" <mxsm...@gmail.com> wrote in message
news:0eeod3li4lmn1mqkn...@4ax.com...
Mixedup:
You might want to familiarize yourself with some terms apparently foreign to
you....
"Par" value
"Book" value
"Market" value
....and to consider that the prices of many stocks are driven by
owner/prospective purchaser expectations for increases (or decreases) in
sales, profits, capitalization, etc.
TMO
Willie...@gmail.com
> Willie.Moo...@gmail.com writes:
> > So, because you can take physical delivery of the commodity that
> > creates intrinsic value according to you.
>
> No, many things have intrinsic value whether or not you can "take delivery."
> Land isn't delivered, but it has intrinsic value.
HAHA.. someone said ofyou above, you are mixed up! I have to agree.
You think this is a discussion about mobility? lol What a trip. I
am thinking you are being pointlessly argumentative, because no one
could be as stupid as you about this subject, but then again, you have
thrown out some real winners! hahahaha..
Let me compose myself for a second.. rotflmao..
Dude, you take possession of land, same thing.as taking delivery - in
thiscontext.
> > That's stupid because in many instances, actually taking physical
> > delivery incurs costs far in excess of what you paid - creating
> > negative value..
>
> In many instances, it costs nothing, or nearly so.
??? How much land do you own? I thought so. haha..
>Land doesn't have to be
> delivered.
Well, if you actually buy land, a deed is delivered free and clear of
encumberances if you do everything right. Same thing. haha..
>A product formula can be e-mailed. Licenses for IP can be
> conveyed in the same way.
Deeds can be conveyed the same way - so, you are messed up man.
> > The productive value - as you are now calling (as opposed to intrinsic
> > value which you wrongly claim to be defining) - depends on who uses it
> > and what its used for.
>
> The important fact is that it can be used productively.
??? A land can have a use or function limited only by the imagination
of the owner. And so that value can change. Conditions can change as
well.in ways that impact land value.
> It has value that
> does not depend on anyone's willingness to buy it again.
Great. I have some lake front property on the Salton Sea I can sell
you. Complete with 80 room motel and restaurant. haha..
> > Think about it man. A trading lot of pork bellies is 40,000 pounds on
> > the CME. FORTY THOUSAND POINDS - that's a train car load of meat!!!
>
> Yes. It can feed a lot of people. You can't feed anyone with stock
> certificates.
Nonsense. I could buy 40,000 shares of BP Prudhoe Bay Royalty Trust,
a special finance company organize to develop Prudhoe Bay using skills
of BP - very much how I am suggesting a special finance company be put
together to finance the construction of a dozen Mach 3 SSTs to serve
LA-tokyo and NYC-London... anyway they pay around $3 per share per
quarter - has done so since oil started to flow, and will likely
continue to do so as long as there is oil in that thar bay... So,
40,000 of these shares ties $120,000 every quarter is $40,000 per
month - divided among 50 families, that's $4,000 per month - enough to
feed clothe and house 10 families!!! ALL without the trouble of
handling 40,000 pounds of greasy pig carcasses.
http://www.dividendinformation.com/b/index.php?content=top_dividend_stocks
http://finance.yahoo.com/q?s=bpt
>
> > That much bacon is of very limited value to most people. Even you.
>
> It's valuable to people who are hungry,
For someone who is hungry, they'd much rather have $4,000 per month
for the rest of their lives, and their children's lives, than tons of
unprocessed greasy pig carcasses that spoil after a while. Like I
said, 40,000 pounds of meat would be made into 20,000 pakages of bacon
in a few days and shipped to those who need it. Who's going to do
that work without getting paid? lol.
You are flailing at a dead horse, or pig rather - if you think people
would rather have large quantities of unprocessed, unseasoned raw pork
than a dividend check from a reliable and profitable project like
Prudhoe bay. sheez.
> and it remains so irrespective of any
> speculation.
Very little speculation about Prudhoe bay. We know how much oil is
there, how much capacity there is to ship oil and even know how long
it will last. The company doing the work is well respected and quite
competent, and its in a nation that respects property rights, rule of
law, and has relatively low taxation - so, no surprises there either.
If you would ask 50 starving families if they'd like to have two tons
of pork bellies delivered to them or $4,000 per month for the rest of
their lives, and their children's lives, which do you think they'd
take?
They'd go for the cash obviously.
Because it has greater value to them.
Which means you are wrong about all the bull you are saying about
intrinsic value.
> > What would you or me or anyone do with 40,000 pounds of pork belly
> > meats showing up at your house?
>
> Cook it and sell meals to people who are hungry.
Give 10 hungry families $4,000 per month and they won't be hungry
either.
Without all the bother.
Besides you ignore the fact that the act of cooking and selling and
identifying people who would pay you for that is guess what? A
business activity. So, the pork bellies have no value to you whatever
unless you are engaged in the activity you just described.
So, where is your intrinsic value now?
For someone who has never seen a pork belly, odds are you'll end up
with a greasy mess in a few days. Even for someone who is skilled and
knowledgeable, unless they have coolers, cookers, sanitary butcheries,
and a host of other things - you will still end up with a greasy mess
in a few days. And even if you have all of that, unless you can get
20,000 hungry people lined up and organized to take delivery of 20,000
meals, in a few days, you could still end up with a greasy mess.
Obviously you are stubbornly clueless about the realities of what
you're saying - and being stubborn stands in the way of you
understanding even to a small degree of what I'm talking about. But
it does have one benefit for you. It allows you to avoid in your own
mind any responsibility for the losses you suffered. I mean, if you
had invested $160,000 in BPT in November 1999 - rather than $160,000
in say Enron stock, you would be enjoying a $40,000 per month
windfall, and your stock would be worth something on the order of $3.2
million if you cared to liquidate it.
In short, if you would have done your homework in the fall of 1999 and
made a careful considered selection of stock, you would have been
'lucky' - and earning a decent income, and have an American Express
black card...
I also see you elided all my descriptions of the practical difficulty
of cooking 40,000 pounds of pork bellies - and my offer to give you
40,000 pounds of the stuff. - which just shows you are dishonest.
This disnonesty, both to me and to yourself, may be at the root of
your poor luck in business. Just something to consider.
Heck, haha.. thinking about handling all the pork, just getting rid of
the massive quantities of pork grease - arranging for the massive
quantity of fuel - to cook 40,000 pounds of unprocessed pork - is
something that would be difficult. You'd end up with about 6,000
pounds of pork rinds, haha.. Maybe George Bush would eat them.haha..
I had the great opportunity of funding a fellow who had really great
BBQ pork ribs at a series of Jazz Fests a few summers ago. Me along
with other investors had the opportunity to schlep some ribs, some
pulled pork, some pork rinds.. haha.. and man we handled something
like 2,000 pounds of pork product in three days of the festival. And
only about 30% of the work was done on site - there was a lot of work
that had to be hired out to local kitchens and whatnot. A dirty nasty
business - that results in disaster unless its carried out with the
precision of a military campaign - but still a lot of fun, and got to
meet a lot of people. haha.. I can't imagine processing 40,000
pounds of PORKBELLIES into something useful in those same number of
days. You'd multiply the effort 20x - and end up with a very limited
range of products.
Have you ever seen a pork belly? not a pretty sight.
> > Now, if you were set up like Hormel or any number of other meat
> > processors to make efficient use of those meats, then they'd have
> > tremendous productive use.
>
> Yes, because they have intrinsic value. But Hormel couldn't make anything to
> eat out of stock certificates.
You are confused.
You can't eat the sales receipt at the check out line either, but that
doesn't change the fact that it provides proof of purchase - and so is
valuable to you as you carry your products out the door. Especially
if a security guard happened to ask you if you actually paid for that
bacon you were carrying.
With the receipt you could claim ownership and show him you paid.
This gives you the right to carry it out the door. Failing that he
could take the bacon away from you and leave you hungry.
Stocks are the same sort of thing as a sales receipt.
Stock certificates show ownership interest in business entities. This
gives the owner certain rights and those rights have certain values -
depending on the company and what they're up to..
Now if you were buying bacon at the store to eat, that's one thing.
But if you're buying bacon to make BLTs at a restaurant you own,
that's another. You might have a run on BLTs and make a tidy profit
on your bacon purchase. You might not sell a single BLT in six months
and have to throw your Bacon out. - clearly if you intend to eat the
bacon you have less risk of total loss. If you intend to sell it, you
have some risk of total loss - and may end up losing money if things
don't go well.
The only way you know, is to total up all the receipts you have for
BLTs and subtract the reciepts of all the labor, bread, lettuce,
tomatoes and bacon that you purchased that went in to make them.
To determine profits you are comparing one set of receipts against
another.
To determine costs - assuming you consume the bacon - you divide the
sandwiches you made against the receipts that total up the cost.
Same with stock. You can buy and hold it for dividend income. You
can buy it to sell at a later date.
If you happened to buy say 40,000 shares of BP Prudhoe Bay Royalty
Trust back in November 1999 for $4 per share,($160,000) in the
facility you would have paid the same as you might for 40,000 pounds
of pork bellies.
But you today would earn $40,000 per month - payable every quarter -
based on oil shipped out of the facility.
The stock certificate can be thought of as a sales receipt. Both give
you rights of onwership.
[snip] the rest of the pointless argumentation -
Point is, 12 Mach 3 SSTs could be built for about $18 billion - and if
properly financed as a special project - similar to the way BPT is
structured, those who investe $18 billion would have ownership
position worth about $28 billion the day the aircraft flew. If this
was done in a few years, they'd earn more than they might if they
invested in Boeing or Lockheed directly without the project.
.
Marty Shapiro
news:1188945300....@57g2000hsv.googlegroups.com:
> On Sep 3, 11:57 pm, Mxsmanic <mxsma...@gmail.com> wrote:
>> Willie.Moo...@gmail.com writes:
>> > So, because you can take physical delivery of the commodity that
>> > creates intrinsic value according to you.
>>
>> No, many things have intrinsic value whether or not you can "take
>> delivery." Land isn't delivered, but it has intrinsic value.
>
> HAHA.. someone said ofyou above, you are mixed up! I have to agree.
> You think this is a discussion about mobility? lol What a trip. I
> am thinking you are being pointlessly argumentative, because no one
> could be as stupid as you about this subject, but then again, you have
> thrown out some real winners! hahahaha..
>
> Let me compose myself for a second.. rotflmao..
Willie -
You've seen through Mxsmoron, aka Anthony Atkielski, much faster than
most. He is an incorrigible argumentative troll who thinks that because he
has read a book about a subject he suddenly knows as much if not more about
that subject than the people who wrote the book or have years and years of
experience.
He tried to pass himself off as a pilot in the aviation newsgroups
when it turned out all he had done was played with Microsoft Flight
Simulator. But that didn't stop Anthony from giving piloting advice to
experienced air show performers and airline pilots as well as
aviation medical advice to an Air Force Flight Surgeon. And he would
become argumentative and constantly elide the information generously given
to him by those who had both he knowledge and experience in multiple futile
attemps to justify his initial position.
If there is any doubt why Anthony lost his shirt on the market, one
only has to look at a picture of him doing his due diligence research
before investing: http://tinyurl.com/58wun
--
Marty Shapiro
Silicon Rallye Inc.
(remove SPAMNOT to email me)