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by hnthrow1010 1435 days ago
>then literally the entire stock market is a ponzi scheme - how else would you pay investors more if you weren't making money off of new investors paying more for the exact same stock?

No, this is very wrong and is based on a fundamental misunderstanding of stocks that seems to be going around in crypto circles. The stockholders make money from the actual, real profits of the company, either through dividends or buybacks. The entirety of crypto is like if everything were an unregulated penny stock in a company that openly announces they have no profits and they have no plan to ever make profits.
2 comments
toolz 1435 days ago
> real profits of the company, either through dividends or buybacks.

The majority of my profits in the stock market have been through asset appreciation. Just take S&P500, a very widely invested in fund - the average dividend yield is 4% while the average return is 12% - which means for that very common stock the majority of the profit came from appreciation.

This doesn't address buybacks, which is a pointless variable as buybacks are nothing more than "new investments" coming in to buy the exact same stock at a different price.

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hnthrow1010 1433 days ago
>which means for that very common stock the majority of the profit came from appreciation.

And you can see from the last few months how that's still an inherently risky attitude towards investing. I agree, buybacks are also a questionable scheme that can easily get used to scam, but at least those are (in theory) based on real profits. You're betting that the company is going to grow and create more valuable products and services in the future. In crypto, there's no profits and no value whatsoever. The average dividend yield of a crypto investor is always going to be 0%. You're not betting on anything besides the ability to dump the thing off on someone else.

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mitchdoogle 1435 days ago
Many stocks don't have dividends - what about those ones? Are they Ponzi schemes? There are a ton of companies with stock values much higher than you'd expect based on their business performance - are those stocks Ponzi schemes?

No they're not. Neither is Crypto, and that's the only point that's being made here. If that seems controversial or incorrect to you, then I think you have some emotional hangup about crypto

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