The Flipper: Hero of the Markets
By
Another_Fan,
Posted on: 2010-09-25 10:53 in The Market and Inventions
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The majority of capital in the stock market is there as capital investment, not for speculation.|
Originally Posted by seebs
That is why I had "investment" in scare quotes -- because very, very, few people actually invest, but a lot of people speculate.
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Really, there can be no more discussion if you have such profound misconceptions of economics and the stock market and make such unfounded assertions.
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Originally Posted by Misaligned
First off, ditch the attitude, you only make yourself look foolish. I can do that for you well enough, I don't need your help.
Flipping as defined by the people of this game is either: Buying 1 product and then selling that product for a profit. OR Buying the parts of a larger product, assembling that product, then selling the completed product at a profit to the whole. Either works - but this thread makes the assumption that we are using the first definition. If you disagree, read the first post. If you still disagree, I can point out any billions of real world examples for the later. Namely, anything you purchase that is not raw product you pulled out of the Earth yourself. Moving on... By that definition, anything you do in real life where you purchase something, then intend to sell it for a profit after doing nothing with it, is flipping. Stocks fall under this jurisdiction quite nicely. You think the guy managing your mutual fund would keep his job very long if he didn't attempt to buy low and sell high? His only interest in any company is what actions it is currently undertaking that will potentially adjust the stock price. You make this same argument in a sideways fashion: Hi. The stock market is only about speculation. Unless someone has developed time travel, I really fail to see how trading in stocks, bond, currency.. ect is anything other than speculation. You recieve no goods or services for your investment other than money. This is the epitome of flipping. |
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Originally Posted by Zombie Man
The majority of capital in the stock market is there as capital investment, not for speculation.
Really, there can be no more discussion if you have such profound misconceptions of economics and the stock market and make such unfounded assertions. You know nothing of economics or how the stock market works. You take the unintended and abused aspect of market speculation and think that's the whole of it. Asserting otherwise doesn't make it true. |
Right.
You're right. I'm clueless and you know everything. Thank you for the enlightenment.
have a nice life man, I'm sure you've earned it.
Edit: Thanks for the new line on my signature. I like it
Pretty much everyone working on Wall Street is trying to shorten the attention span of the investor. They make their money on commission.
"The market is a vehicle for transferring wealth from the active to the patient." I don't remember if that was Buffet quoting Graham, or Buffet being Buffet.
It applies in this game, too, only the "patient" sometimes have attention spans as short as five minutes. Long-term capital gains in this game would be "bought on Tuesday to sell on the weekend."
Mini-guides: Force Field Defenders, Blasters, Market Self-Defense, Frankenslotting.
So you think you're a hero, huh.
@Boltcutter in game.
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And how do you determine this?|
Originally Posted by Zombie Man
The majority of capital in the stock market is there as capital investment, not for speculation.
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| Really, there can be no more discussion if you have such profound misconceptions of economics and the stock market and make such unfounded assertions. |
Conversation, have you ever heard of it?
Perhaps more importantly, I think you're overlooking a key distinction, that between "the majority of stock owned" and "the majority of stock traded".
Most owners are in for the relatively long hall. Most trades are shorter term. (Think about the reasons for this; if I hold a thousand shares for a year, and you trade a thousand shares a week, 52 times as many shares are short-term trades as longer-term holdings, even though we are both holding the same number of shares...)
In general, the long-term holdings don't have a huge effect on prices; it's trading, not holding, that sets prices. The "price" of a stock isn't some kind of abstract measure of value; it's just the price of the last single trade. Think of it as being equivalent to the topmost number in the "last 5 transactions" window... because that's what it is.
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| You know nothing of economics or how the stock market works. |
I've been dealing with an investment portfolio (and more "investment" than "speculation") for something on the close order of twenty years now.
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| You take the unintended and abused aspect of market speculation and think that's the whole of it. |
But who said I thought that was the whole of it? I just think it's the part that dominates trading prices over the short term. Because, after all, if you're in a stock for the long haul, with no plans to buy or sell for twenty years, you are having very little effect on price. While someone who's buying and selling today may well be affecting the price.
Heck, look at the number of sudden jumps or falls the market has had in the last couple of years caused entirely by glitches in software that's trading stuff in seconds and minutes, not even days... That stuff affects prices, and it affects prices quite a bit.
And underneath it all... The majority of individual actors who are buying and selling stock are speculating. Sure, there's exceptions, but for the most part, they're buying something because they think it's going to go up, or selling it because they think it's going to go down.
Sure wish I could go outside, kill a raccoon and turn it into a Class A Berkshire Hathaway stock.
I was thinking about the Goat's Flipper Fridays and I like it.
So I am going to start a separate thread on that.
total kick to the gut
This is like having Ra's Al Ghul show up at your birthday party.
You know it would have to be a King Raccoon. And you'd have to kill 2000 on average to have a pelt that was a share of a Fortune 500 company. And only 1 in 500 of those would be a BRK-A share.
... not that I'd MIND getting a share of Google, say, but it's not the same.
Mini-guides: Force Field Defenders, Blasters, Market Self-Defense, Frankenslotting.
So you think you're a hero, huh.
@Boltcutter in game.
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Last I heard, prices of Google stock are going up after a very long plateau.
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Originally Posted by Fulmens
... not that I'd MIND getting a share of Google, say, but it's not the same.
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Berkshire never split their stock ever. Warren Buffet was growing the company 30% a year for a startling number of years. It started at $10 a share back in 1960-something. (The stock has only gone up about 30% since 2001, which may mean it's underpriced...)
And that's why people talk about him like he's a financial superhero. Cause he is.
Mini-guides: Force Field Defenders, Blasters, Market Self-Defense, Frankenslotting.
So you think you're a hero, huh.
@Boltcutter in game.
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Ahh, see.|
Originally Posted by Zombie Man
The majority of capital in the stock market is there as capital investment, not for speculation.
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That's where the magic happens.
How much capital is "in" the stock market?
Let's say I have a thousand shares of Apple, and Apple stock sells for $280. Is that $280,000 of capital? Okay, so, say Steve Jobs has a bad cold, and Apple stock drops to $200 overnight. Now do I only have $200,000 of capital? Where'd the rest go?
Here's the Big Dark Secret: The money people put into initially buying stocks from the issuing companies got invested. The money that is traded shuffling those shares around, though, is not "invested" in the same way. That money doesn't go to the companies whose stock is being traded. They don't get that money. You can buy a million shares of Apple (if you're rich enough) without Apple Computer getting so much as a penny. All you're doing is betting that it'll go up. You aren't doing anything to affect outcomes one way or another.
Investment generally carries the connotation that your choice to spend money in one place rather than another is expected to have some kind of influence on outcome. I can invest in a better build machine for my software projects, because the build machine could affect the outcome. But you can't "invest" in Apple in that sense -- there's nothing you can do such that you're buying stock and this leads to them being able to produce better computers.
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| Really, there can be no more discussion if you have such profound misconceptions of economics and the stock market and make such unfounded assertions. |
I know this is gonna sound shocking, but economists actually study things like stock market crashes, to report on how they work and what causes them.
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| I am making the unsupported and unfounded assertion that you know nothing of economics or how the stock market works. I am also asserting that you take the unintended and abused aspect of market speculation and think that's the whole of it. Asserting this doesn't make it true. |
You're (now that I've fixed your post) quite right -- your repeated assertions do not make your claims true.
I know it must sound really weird to talk about "reasoning" and "evidence", and that's probably just more proof to you that I'm some kind of crazy guy, because being a true economist you know that economic theory is what your gut tells you is true, not what some "research" or "evidence" or "logic" would support.
But it comes down to this: If you want anyone to come to believe what you believe, you will have to persuade them. And if you want anyone to come to believe that you have support for your beliefs, you'll have to present some of that support. Otherwise, you're just another excellent demonstration of the Dunning-Kruger effect, reminding us all that people who are smug and dismissive of others, but never advance arguments, usually don't know what they're talking about.
Wow. Seebs went back for seconds on that post. Personally, I gave Zombie up as a lost cause, but apparently Seebs disagrees.
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I blame bad cookies, sometimes my browser shows me old stuff as "new posts". It took me a while to realize why his post seemed so much like his old post... after I'd already posted. Ah, well.
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Originally Posted by Zombie Man
Wow. Seebs went back for seconds on that post.
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Well, i went to flip earlier to see what all the fuss was about. I just did some simple pieces of salvage. Ruby and Steel. I place a stack of 10 on each. I bid 2222 for each of the stacks.(they were selling for 50k each or so) I logged for an hour to go get my son from school. When i got back I had bought each of the stacks. I relisted to sell for 22k each. I went to farm with my cousin for an hour. Went back to WW and they had all sold for anywhere from 30k-50k each and i made somewhere in the ballpark of 1mil inf on all of them.
Small number indeed. I make a ton more selling recipes, but its easy inf. Not really worth it for me to search thru for pieces to play with. Id rather play my toons and just sell drops. Though i can't complain because imma buy it nao guy usually but the stuff can be bought easily with time invested. Salvage wise, recipes are different due to drop rates and all.
My conclusion is that flipping isnt all that bad because people decide to pay more for getting it asap. But i still dont like the idea of buying up ALL of stuff in order to just raise the prices for everyone else. That to me says alot about someone. And i hope they arent like that in real life. That's all for now. 
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My sig. |
Originally Posted by eryq2
Well, i went to flip earlier to see what all the fuss was about. I just did some simple pieces of salvage. Ruby and Steel. I place a stack of 10 on each. I bid 2222 for each of the stacks.(they were selling for 50k each or so) I logged for an hour to go get my son from school. When i got back I had bought each of the stacks. I relisted to sell for 22k each. I went to farm with my cousin for an hour. Went back to WW and they had all sold for anywhere from 30k-50k each and i made somewhere in the ballpark of 1mil inf on all of them.
Small number indeed. I make a ton more selling recipes, but its easy inf. Not really worth it for me to search thru for pieces to play with. Id rather play my toons and just sell drops. Though i can't complain because imma buy it nao guy usually but the stuff can be bought easily with time invested. Salvage wise, recipes are different due to drop rates and all. My conclusion is that flipping isnt all that bad because people decide to pay more for getting it asap. But i still dont like the idea of buying up ALL of stuff in order to just raise the prices for everyone else. That to me says alot about someone. And i hope they arent like that in real life. That's all for now. |
A guide to being lazy about flipping salvage.
My kids do it. They clear about 10 mil a week. Considering they're generating about 1/10th of that through actual play, they're doing pretty awesome.
If I can teach them marketeering, I intend to put them to work in the IO mines.
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And if anything, that's vastly understating it. |
Originally Posted by Fulmens
And that's why people talk about him like he's a financial superhero. Cause he is.
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Leader of Legion of Valor/Fallen Legion (Victory server)
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StainedGlassScarlet - L50 Spines/Inv Scrapper | Badges: 1,396
Avatar detail taken from full-size piece by Douglas Shuler here
I don't sell too much salvage on the market these days with the A merit system going on.
I have 4 toons in the 20's, 2 stalkers, 2 masterminds, each does their "dailies" every day, which equates to 4 H/V merits every 2 days
I'll hold off until they each have 2 merits each, then cash them in for either a Numina proc, LotG +rech, or whatever is selling for around 150mil+ at the time. I use toons in the 20's since the lower-level recipes like those seem to cost more than the lvl 50 ones due to less supply.
Assuming it's 150mil that day for whatever I'm selling, that's a good 600mill (for the crafted product) every 4 days.
Took a look at some of the purple prices going, most are at anywhere from 40-400mill, crafted.
Does anyone actually save up 20 H/V merits for just the recipe?
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Someone might, but they're not thinking straight.
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Originally Posted by beyeajus
Does anyone actually save up 20 H/V merits for just the recipe?
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Culex's resistance guide
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If you can clear a million in two hours flipping low-end salvage (buy at 2k, sell 30k+) with no previous experience of flipping, just think what you could do with certain recipes (buy at 5mil, sell at 20mil+).|
Originally Posted by eryq2
Well, i went to flip earlier to see what all the fuss was about. I just did some simple pieces of salvage. Ruby and Steel. I place a stack of 10 on each. I bid 2222 for each of the stacks.(they were selling for 50k each or so) I logged for an hour to go get my son from school. When i got back I had bought each of the stacks. I relisted to sell for 22k each. I went to farm with my cousin for an hour. Went back to WW and they had all sold for anywhere from 30k-50k each and i made somewhere in the ballpark of 1mil inf on all of them.
Small number indeed. I make a ton more selling recipes, but its easy inf. Not really worth it for me to search thru for pieces to play with. Id rather play my toons and just sell drops. Though i can't complain because imma buy it nao guy usually but the stuff can be bought easily with time invested. Salvage wise, recipes are different due to drop rates and all. My conclusion is that flipping isnt all that bad because people decide to pay more for getting it asap. But i still dont like the idea of buying up ALL of stuff in order to just raise the prices for everyone else. That to me says alot about someone. And i hope they arent like that in real life. That's all for now. |
That's why marketeering is so popular amongst those who discover it and don't mind using the market.
- @DSorrow - alts on Union and Freedom mostly -
Currently playing as Castigation on Freedom
My Katana/Inv Guide
Anyone who doesn't take truth seriously in small matters cannot be trusted in large ones either. -Einstein
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You can pick the level of the recipe which you purchase with A-Merits. I've bought lvl 20 (think it was that) LotG +Rech with a lvl 50, then gave to a lower level character.
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Originally Posted by beyeajus
I'll hold off until they each have 2 merits each, then cash them in for either a Numina proc, LotG +rech, or whatever is selling for around 150mil+ at the time. I use toons in the 20's since the lower-level recipes like those seem to cost more than the lvl 50 ones due to less supply.
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Even after reading this entire thread, I still have a bit of an irrational hatred for flippers. It's like if I opened a lemonade stand, selling lemonade for 15 cents a glass, and someone came along, bought all my lemonade and then set up a stand next to mine and started selling it at $2 a glass. It's just that feeling that you did all the hard work and then someone else came along and made a huge profit from it.
(This is a very good analogy: note that even if the other person did no work to actually produce the lemonade, they obviously did some research into how much you can sell lemonade for. Maybe if I'd done the same research, I would have tried to sell my lemonade for $1.50 instead. Rationally, I really have nothing to complain about, I got exactly as much for my lemonade as I wanted, and I can go home early. But I will still resent the lemonade flipper a little.)
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Seebs said
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Apple has 913 million outstanding shares. | But you can't "invest" in Apple in that sense -- there's nothing you can do such that you're buying stock and this leads to them being able to produce better computers. |
With a million shares, you go to stockholder meetings and someone might listen to you.
With (counts on fingers) 458 million shares, you have a controlling interest and people WILL do what you tell them. This may or may not result in better computers and/or more sales, but it's certainly a change.
This is why I get angry when people talk about things like "Shareholder activism" because you're not an activist, you're the Man.
(Google has two classes of shares, and Sergey Brin's shares get 50 times as many votes as yours do, or some similar ratio. But that's a different rant.)
Mini-guides: Force Field Defenders, Blasters, Market Self-Defense, Frankenslotting.
So you think you're a hero, huh.
@Boltcutter in game.
Your analogy scenario give you a great opportunity, though: You already know you can make a profit on lemonade at 15 cents a glass. So, you whip up another batch, price it at $1.50 a glass, and then giggle as your competition has to decide between investing more to buy you out again or waiting for almost everyone to buy yours first. They've done the drudgery of finding out how much the market would bear, now you get to make an almost guaranteed higher profit off of it.
Buying a stock and selling it for a higher price is *supposed to* happen because the value of the business, which the stock represents, has increased. It's called investment and stocks are a *tool* to invest in a business.
The misunderstanding comes from you equating buying and selling stocks in the way that *speculators* do. Speculators buy low and sell high not so much on the increased value of the business the stock represents, but on the *perceived* value which is driven by lots of things other than actual value.
Perceived value of a stock that is *thought to be* 'hot' makes it in high demand, whether or not the business is doing well. High demand drives up its price. But if the quarterly returns show the business is tanking, then the value drops greatly and all those who bought on the bubble going up are now out a lot of real money.
Speculative bubbles nearly destroyed this country in 1939 and almost again in 2008 -- partly in thanks to flippers who were buying and selling on perception and demand (i.e., speculating, i.e., flipping) rather than on a reasonable real value of the stocks.
When people have a retirement account, they are structured to assume a return of about 7% interest per year which is in line with historical growth in Gross Domestic Product. IOW, the gains come from actual increase in value of the business which the stock represent. That's not flipping. Flippers speculate and try to game the stock market to get much higher yields, thus destabilizing the whole economy.
So how's that for irony? This thread was to applaud the supposedly stabilizing influence of flippers. And when flippers point to stocks, it pretty much indicts them for doing something truly evil... in the very ethical sense of the word that the cutesy 'ebil' tries to hide.
First off, ditch the attitude, you only make yourself look foolish. I can do that for you well enough, I don't need your help.
Flipping as defined by the people of this game is either:
Buying 1 product and then selling that product for a profit.
OR
Buying the parts of a larger product, assembling that product, then selling the completed product at a profit to the whole.
Either works - but this thread makes the assumption that we are using the first definition. If you disagree, read the first post. If you still disagree, I can point out any billions of real world examples for the later. Namely, anything you purchase that is not raw product you pulled out of the Earth yourself.
Moving on...
By that definition, anything you do in real life where you purchase something, then intend to sell it for a profit after doing nothing with it, is flipping.
Stocks fall under this jurisdiction quite nicely. You think the guy managing your mutual fund would keep his job very long if he didn't attempt to buy low and sell high? His only interest in any company is what actions it is currently undertaking that will potentially adjust the stock price. You make this same argument in a sideways fashion:
Hell, the entireity of Wall Street is dedicated to "Flipping" in one way, shape, or form. For you to classify only the day traders who manipulate prices for a VERY short amount of time as the only "flippers" in the market makes you look just silly. You call them speculators. As I showed above, everyone in the market even a tiny bit is a speculator. Your definition is only self-serving in this case.
If you are going to make the assertion that flippers in this game are like day traders, be my guest. The impact a day trader or even a group of day traders working together has a similar impact on the price of a single stock as a flipper has on the price of a piece of salvage. You'd be proving the point of this thread. Works for me.
As for your "speculative bubbles" nonsense - it wasn't and isn't the speculation in the market that causes the hurt - its the speculation of credit investors like banks who do loans to people they should not be giving loans to for way more than they should have gotten in the first place that causes market instability. You'd think that after having just gone through this that you'd understand that.
It is not the speculation of the investors in the companies - it is the speculation of large companies investing in individuals who cause the problems with the market. Enough people can't pay their mortgage and the "perceived value" of that lending institution goes in the toilet. Day traders, mutual fund management firms, hell, even the guy on E*Trade had very little impact on the outcome of that scenario beyond providing the lending institutions with the funds to make these bad decisions.
By that logic, you could then assign blame to the market for its speculation in a company that is publicly traded but goes belly up.