Anonymous asked in Business & FinanceInvesting · 2 months ago

what really is a "bubble"? what causes them? do you think the entire stock market is a big ponzi scheme?

 do companies even pay dividends anymore to their share holders? companies buy their own stocks to give the illusion of profits in order to entice people to invest in their stocks just for them to sell off when they get enough "Suckers" on board? if so , does that mean that the stock market is like a big poker game,,,where investors are just ripping each other off, and any money made is by screwing someone else out of their money?

5 Answers

  • 2 months ago
    Favorite Answer

    Oh, that bubble.  What it really is at the end of the day, is a leftist conspiracy theory.  It's very much like the right wing conspiracy theory that socialism is 'silently sneaking' into post-secondary education, because it takes something that is happening in the open and puts a sinister secret behind it.  

    The bubble theory, which applies to any investment market, claims that prices (real estate, corporate shares, etc.) are artificially inflated by some consortium of ne'er-do-well elites who will then take their ill-gotten money out of the system and cackle with glee when the whole thing suddenly crashes to the ground.  In reality, there are ruthless and greedy investors in any market.  But they rarely work together, because greedy people don't like sharing and don't trust others.  Greedy people are extremely self-centered and don't play well with others.  Certain current US presidents, no names mentioned, are a perfect example.  

    And yes, the world of investments is just like a poker game, only minus the fun and the stripping.  Investing is a form of gambling, and whenever gambling happens someone has to lose.

  • 2 months ago

    Some companies still pay dividends to their shareholders, some don't anymore,and some never did.

    Companies buy their own stocks, but it's not to give the illusion of profits.  It's because they really do have profits and don't need the money and because an increase in the stock price tends to be good for whomever is running the company (they usually own some stock in the company).

    They don't sell off "when they get enough 'Suckers' on board; many companies buy their own stock and don't sell it.

    The stock market is not like a big poker game,,,where investors are just ripping each other off.  Not all the money made is by screwing someone else out of their money; some of the money is from the companies.

  • 2 months ago

    A bubble is a situation in which asset prices appear to be based on implausible or inconsistent views about the future.

    The first known economic bubble was "Tulip Mania" in the 17th century when some tulips cost as much as five houses.

    Bubbles are generally caused by people seeing others making a lot of money and trying to get rich by following their example.

    The stock market is not a big ponzi scheme.

    A lot of companies still pay dividends.

    Companies do not buy their own stocks to give the illusions of profits.

  • Anonymous
    2 months ago

    Social Security is a Ponzi scheme.  "Contributors" are forced to participate with absolutely no guarantee of any kind of return unless enough additional people can be forced to participate.  It is also unconstitutional.  I DEFY anyone who disagrees to cite the Article or Amendment to the Constitution that allows it. 

    The stock market is a gamble.  The more you risk, the greater your return.  I have received dividends from almost all of my stocks.  Dividends are paid from profits the company makes, not by "screwing someone else out of their money" like Social Security.

  • How do you think about the answers? You can sign in to vote the answer.
  • Anonymous
    2 months ago

    Speculative Bubbles tend to bring people into the market who don't usually invest.

    That's your first warning sign something is a bubble. 

    If there is a lot of hype and media along with it then you definitely have a bubble. 

    Like the 2017 bitcoin bubble. 

    Generally smart investors stay away or sell early when bubbles form.

    The stock market isn't any different to any other perfect competition market, price is decided by supply and demand. 

    And yes, dividends are still paid. 

Still have questions? Get your answers by asking now.