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And yet another free-market theory failure - Page 9

post #321 of 338
7/4/11 at 3:13pm
Quote:
Originally Posted by MJ1970 View Post

Ahhh...the infamous jimmac gambit:










It's cute how often you accuse those you disagree with of this, but never seem to be guilty of it yourself. Off.




Well, I'm not seeing it because you're not explaining it. So, once more:

What exactly are they doing that is wrong? What exactly are they doing that should be stopped? What exactly is bad about the system? Would you clarify these things?

One additional question: Have you ever purchased stock in a company, directly or indirectly (e.g., mutual or index fund)?

MJ it's people getting rich on the backs of other people. Didn't explain it? Did you read the study and their conclusions?

Quote:
That "speculative premium" cost the typical U.S. driver $41 for the month of May ($82 for two-car families) and amounted to a $1 billion drag on the U.S. economy, according to the study.

I just can not see it your way and never will. Not on this.
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post #322 of 338
7/4/11 at 3:18pm
Quote:
Originally Posted by jimmac View Post

MJ it's people getting rich on the backs of other people.

So this is it? This is your answer to the question? This the best you can do?

Quote:
Originally Posted by jimmac View Post

I just can not see it your way and never will. Not on this.

So this explanation is unconvincing to you in any way, shape or form:

Quote:
Originally Posted by MJ1970

First, you're assuming their actions affect it a lot. But let's go with that assumption for a moment. In essence what speculators do is to place a bet that future prices of a good will rise. In placing this bet they are open to two possibilities a) they are right and they will profit from this prediction, b) they are wrong and they will lose (a lot) because of their prediction. Possibility B gives them the incentive to bet wisely and knowledgeably not recklessly and capriciously. In placing these bets, they are usually betting there will be less of a some good (say oil) in the future and their bets drive up prices in the short term. This is actually a good thing (if they are right) because it achieves two things at once: a) it causes people buying the good in the present to start conserving and looking for other ways to conserve in the future, b) it causes producers to start looking harder for more of the good, thus increasing the supply.

Speculators provide a valuable service in the market.

Your only response to this is this vague claim that they are "getting rich on the backs of other people"?

I'm just making sure I understand what you're saying here.

The state is nothing more than a criminal gang writ large.

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post #323 of 338
7/4/11 at 3:21pm
Quote:
Originally Posted by MJ1970 View Post

So this is it? This is your answer to the question? This the best you can do?



So this explanation is unconvincing to you in any way, shape or form:



Your only response to this is this vague claim that they are "getting rich on the backs of other people"?

I'm just making sure I understand what you're saying here.

The conclusions in the study don't seem to match yours.

So the study is just wrong? Or didn't you read it? Or don't you care?
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post #324 of 338
7/4/11 at 3:26pm
Quote:
Originally Posted by jimmac View Post

The conclusions in the study don't seem to match yours.

So the study is just wrong? Or didn't you read it? Or don't you care?

You've selected one article about a study and based all your conclusions on that?

Yes I read the article. So what? It says speculators increase the price of a commodity? I have not denied this at all. I know it happens. They can also decrease the price when they short it.

Did you read the articles I posted? Did you read the explanation I provided to help educate you on the role and purpose speculators serve in the market?

So...back to my questions:

Quote:
Originally Posted by MJ1970

What exactly are they doing that should be stopped? What exactly is bad about the system? Would you clarify these things?

Will you answer these questions with anything other than vague generalizations?

And also this one:

Quote:
Originally Posted by MJ1970

One additional question: Have you ever purchased stock in a company, directly or indirectly (e.g., mutual or index fund)?

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post #325 of 338
7/4/11 at 3:27pm
Quote:
Originally Posted by MJ1970 View Post

Ahhh...the infamous jimmac gambit:










It's cute how often you accuse those you disagree with of this, but never seem to be guilty of it yourself. Off.




Well, I'm not seeing it because you're not explaining it. So, once more:

What exactly are they doing that is wrong? What exactly are they doing that should be stopped? What exactly is bad about the system? Would you clarify these things?

One additional question: Have you ever purchased stock in a company, directly or indirectly (e.g., mutual or index fund)?

Quote:
for a gallon of regular gas peaked just below $4, speculators added about 83 cents to the total price, according to researchers Robert Pollin and James Heintz. Remove speculators from the market, and gasoline would have topped out around $3.13.


Here's the link again : http://articles.sfgate.com/2011-06-2...res-oil-prices

Quote:
for a gallon of regular gas peaked just below $4, speculators added about 83 cents to the total price, according to researchers Robert Pollin and James Heintz. Remove speculators from the market, and gasoline would have topped out around $3.13.


Quote:
Have you ever purchased stock in a company, directly or indirectly (e.g., mutual or index fund)

Only through our retirement anuity through work. And when the bottom fell out of things in 2008 many of us lost money towards said retirement.
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post #326 of 338
7/4/11 at 3:39pm
Quote:
Originally Posted by jimmac View Post

Only through our retirement anuity through work. And when the bottom fell out of things in 2008 many of us lost money towards said retirement.

Thanks for answering the question. So you have purchased stocks. When you bought these stocks did you do so expecting the price of them to go up?

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The state is nothing more than a criminal gang writ large.

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post #327 of 338
7/4/11 at 3:48pm
Quote:
Originally Posted by MJ1970 View Post

Thanks for answering the question. So you have purchased stocks. When you bought these stocks did you do so expecting the price of them to go up?

That doesn't excuse what the speculators are doing. That's more than going up and they are a drag on a key component of the U.S. economy at a time that is damaging to it.

And by the way many have removed the stock opition from their anuity.

Sorry but many ride the stock market but what the specualtors are doing not simply purchasing stock for their retiremnet that their employer encourages. Not the same thing at all. Please!
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post #328 of 338
7/4/11 at 3:51pm
Quote:
Originally Posted by jimmac View Post

That doesn't excuse what the speculators are doing.

So you're saying it's okay for you to speculate on stocks, but not for others to speculate on other assets or commodities?


Quote:
Originally Posted by jimmac View Post

That's more than going up and they are a drag on a key component of the U.S. economy at a time that is damaging to it.

Yes, this is the claim of some. There's very little evidence to support this claim.


Quote:
Originally Posted by jimmac View Post

Sorry but many ride the stock market but what the specualtors are doing not simply purchasing stock for their retiremnet. Please!

But, fundamentally, the actions are exactly the same.

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post #329 of 338
7/4/11 at 4:11pm
Quote:
Originally Posted by jimmac View Post

So in the end it's still jst another way to look at things.

Yes, it is. In one way, we account for things that actually affect consumers. In the other, we leave two of those entire categories out.

Quote:

About the speculators so you're going to ignore the other side of this argument completely because you're just right. And you'd just let speculators do what they want?

I'm not ignoring the role price speculation has. I'm not downplaying it. But as for "letting them do what they want," well...that's no so simple. I think there are things we can do, such as dumping 1/3 of the strategic petroleum reserve on the market in one day. This would cause the price to plummet. They might think about driving up the price again.

But other than that, they are not doing anything illegal. And "they" is basically anyone that invests in oil. That number has got to be in the millions.

Quote:

Never mind it's a bad system to be set up that way.

This is a clear illustration of what's wrong with conservative thinking these days.

It has nothing to do with "conservative thinking." It has to do with oil being traded in the free market, like other commodities. Are you suggesting it's no longer part of the market place? How exactly would that work? And are you saying that the free market itself is a bad system?



Quote:
Originally Posted by jimmac View Post

That doesn't excuse what the speculators are doing. That's more than going up and they are a drag on a key component of the U.S. economy at a time that is damaging to it.

Reading this kind of statement again, I really don't think you know who "the speculators" are.

Quote:

And by the way many have removed the stock opition from their anuity.

So?

Quote:

Sorry but many ride the stock market but what the specualtors are doing not simply purchasing stock for their retiremnet that their employer encourages. Not the same thing at all. Please!

There are so many problems with this statement I almost don't know where to begin. Let's start by asking:

1. Is having stock for retirement the only moral way of investing in stock?
2. How are the speculators different?
3. Should we be listening to our employers re: financial advice?
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post #330 of 338
7/4/11 at 4:41pm
Quote:
Originally Posted by SDW2001 View Post

Yes, it is. In one way, we account for things that actually affect consumers. In the other, we leave two of those entire categories out.



I'm not ignoring the role price speculation has. I'm not downplaying it. But as for "letting them do what they want," well...that's no so simple. I think there are things we can do, such as dumping 1/3 of the strategic petroleum reserve on the market in one day. This would cause the price to plummet. They might think about driving up the price again.

But other than that, they are not doing anything illegal. And "they" is basically anyone that invests in oil. That number has got to be in the millions.



It has nothing to do with "conservative thinking." It has to do with oil being traded in the free market, like other commodities. Are you suggesting it's no longer part of the market place? How exactly would that work? And are you saying that the free market itself is a bad system?





Reading this kind of statement again, I really don't think you know who "the speculators" are.



So?



There are so many problems with this statement I almost don't know where to begin. Let's start by asking:

1. Is having stock for retirement the only moral way of investing in stock?
2. How are the speculators different?
3. Should we be listening to our employers re: financial advice?

SDW continuing to claim that " I don't know " or That " I don't understand " when I've posted an article about the subject is intellectually dishonest.

Of course I know who they are. I just don't agree with what they're doing. Or to the extent they're doing it. There is no way that you can excuse this in my way of thinking. And guess what SDW I'm not the only one who thinks this way so please don't even try to infer that. Not the only one by a long shot.

There are many differences between liberal viewpoints and conservative ones. I can excuse those differences for the most part but not this one.


http://www.jubileeinitiative.org/riggedoil.html

http://www.dailykos.com/story/2011/0...via=siderecent

http://www.msnbc.msn.com/id/43510170...ts-speculators

http://www.telegraph.co.uk/finance/n...ity-trade.html


http://www.csmonitor.com/Commentary/...es-Speculators

http://www.heatingoil.com/blog/oil-s...cates-say0112/
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post #331 of 338
7/4/11 at 4:57pm
Quote:
Originally Posted by MJ1970 View Post

So you're saying it's okay for you to speculate on stocks, but not for others to speculate on other assets or commodities?




Yes, this is the claim of some. There's very little evidence to support this claim.




But, fundamentally, the actions are exactly the same.

http://beginnersinvest.about.com/od/...speculator.htm
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post #332 of 338
7/4/11 at 5:00pm
Quote:
Originally Posted by jimmac View Post

http://beginnersinvest.about.com/od/...speculator.htm

Thanks for the link. I'm guessing, you (and probably the average stock buyer/seller) are (or were) a stock speculator whereas the people you've been reviling are actually commodity investors. Good. Glad we settled that.

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post #333 of 338
7/4/11 at 5:02pm
Quote:
Originally Posted by MJ1970 View Post

Thanks for the link. I'm guessing, you (and probably the average stock buyer/seller) are (or were) a stock speculator whereas the people you've been reviling are actually commodity investors. Good. Glad we settled that.

In other words you didn't really read the link.

Quote:
How do these two different types of activity affect stock price? The speculator will drive prices to extremes, while the investor (who generally sells when the speculator buys and buys when the speculator sells) evens out the market, so over the long run, stock prices reflect the underlying value of the companies. If everyone who bought common stocks were an investor, the market as a whole would behave far more rationally than it does
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post #334 of 338
7/4/11 at 5:07pm
Quote:
Originally Posted by jimmac View Post

In other words you didn't really read the link.

No, I did read it. I think you're not truly comprehending what they're saying. They are drawing a distinction between people who are guessing and throwing darts at a board (speculators in the common parlance) and those who spend time investigating, studying, researching and carefully placing their money where they believe it will give them a return (investors).

By these definitions, the "speculators" you're whining about are actually investors (most of them anyway) and people like you and the average Joe on the street buying and selling stocks are speculators.

Quote:
Over the course of the past several decades, the term "investor" has been used for anyone who owns a share of stock. It is important that you understand this is not the case. When a person buys a stock, they are doing it as one of two people: either an investor or a speculator.

What's the difference? An investor is someone who carefully analyzes a company, decides exactly what it is worth, and will not buy the stock unless it is trading at a substantial discount to its intrinsic value. They are able to say, for example, that "Company 'X' is trading for $48 per share, but it is worth $62 per share." They make their investment decisions based on factual data and do not allow their emotions to get involved. A speculator is a person who buys a stock for any other reason. Often, they will buy shares in a company because they are "in play" (which is another way of saying a stock is experiencing higher than normal volume and its shares may be being accumulated or sold by institutions). They buy stock not on the basis of careful analysis, but on the chance it will rise from any cause other than a recognition of its underlying fundamentals. Speculation itself is not necessarily a vice, but its participants must be absolutely willing to accept the fact that they are risking their principal. While it can be profitable in the short term (especially during bull markets), it very rarely provides a lifetime of sustainable income or returns. It should be left only to those who can afford to lose everything they are putting up for stake.

So the people some (like yourself) refer to as "speculators" are actually more likely to be investors (by the definition you have posted) because these people are much more likely to carefully analyze the item they're investing in (a company, a commodity, etc.) than the typical man on the street "investor" who buys AAPL because they like their new iPad.

Now the "speculator" you have been referring to (e.g., oil commodity speculator) is more properly defined here:

Quote:
A person who trades derivatives, commodities, bonds, equities or currencies with a higher-than-average risk in return for a higher-than-average profit potential. Speculators take large risks, especially with respect to anticipating future price movements, in the hope of making quick, large gains.

Quote:
Speculators are typically sophisticated, risk-taking investors with expertise in the market(s) in which they are trading and will usually use highly leveraged investments such as futures and options.

These people aren't just throwing darts at a board. They are studying, researching and monitoring the commodity and industry in which they invest and speculate (in the sense that they take larger risks...not in the sense that they're guessing.)

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post #335 of 338
7/4/11 at 5:18pm
Thread Starter 
Quote:
Originally Posted by MJ1970 View Post

No, I did read it. I think you're not truly comprehending what they're saying. They are drawing a distinction between people who are guessing and throwing darts at a board (speculators in the common parlance) and those who spend time investigating, studying, researching and carefully placing their money where they believe it will give them a return (investors).

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post #336 of 338
7/4/11 at 5:19pm
Quote:
Originally Posted by tonton View Post


The state is nothing more than a criminal gang writ large.

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post #337 of 338
7/4/11 at 5:38pm
Thread Starter 
Quote:
Originally Posted by MJ1970 View Post


It's speculators who do the research, expect a return, and place their money where they think it will give them a return. The other group are called 'morons'.

In investment terms, the kind of speculation that is a problem is commodities speculation, as the only function it serves is to drive up commodity prices further than the 'free market' would normally reflect when there is a perceived demand.
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post #338 of 338
7/4/11 at 5:41pm
Quote:
Originally Posted by tonton View Post

It's speculators who do the research, expect a return, and place their money where they think it will give them a return. The other group are called 'morons'.

Fair enough. And I agree. I'd add that people who partake in high risk investments like oil futures are particularly moronic if they are not researching and studying their investment target. Thankfully very few of these actually get lucky and money and most lose their shirts. But, I was simply responding to jimmac's link which was defining "investors" and "speculators".

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