HorusRa2 5,005 Posted March 2, 2020 Share Posted March 2, 2020 4 minutes ago, Woolfsmck said: Simple math … Software trader x has 100 dollars they buy stock y for 100 dollars the price goes up .00001 percent .. and wha la ,, soft ware sells for .00001 profit .. deduct .01 tax from that trans action and …. profit goes by by … multiply this by 1000's per hour on a large scale …. …. buy an hold … invest Bob buys LG stock for 100 dollars … pays .01 tax sits on stock … price goes up when LG releases new single "Stupid Love" … sells stock for 150 dollars . pays .01 tax so lemme see … 50 net profit from start to finish … there is a fee from trading firm … the tax amounted to .025 dollars … so no this isn't a big hit for this type of investor .. ….. Is it clear as to how this type of tax will affect the market???? its not really that simple ... No but what it means is that investors will be much more calculated in their buying and selling. Or they take the marginal tax as a cost of doing business just like investors do. I think you're trying to say the transactions tax is a bigger threat to investor profits than it really is. Also, investors would actually know the math you just mentioned and instead of selling they would probably hold the stock that would cost them money to sell off in the first place or otherwise they would sell it and take the loss like any normal investor would. So again, if you're going to invest your money in something as turbulent and short-term investments like stocks, you have to accept the associated risk and not expect to only get rewards. Link to post Share on other sites More sharing options...
Economy 52,931 Posted March 2, 2020 Share Posted March 2, 2020 4 minutes ago, Woolfsmck said: Simple math … Software trader x has 100 dollars they buy stock y for 100 dollars the price goes up .00001 percent .. and wha la ,, soft ware sells for .00001 profit .. deduct .01 tax from that trans action and …. profit goes by by … multiply this by 1000's per hour on a large scale …. …. buy an hold … invest Bob buys LG stock for 100 dollars … pays .01 tax sits on stock … price goes up when LG releases new single "Stupid Love" … sells stock for 150 dollars . pays .01 tax so lemme see … 50 net profit from start to finish … there is a fee from trading firm … the tax amounted to .025 dollars … so no this isn't a big hit for this type of investor .. ….. Is it clear as to how this type of tax will affect the market???? its not really that simple ... Turns out it's 0.5% for stocks. 0.1% was for bonds And what I mean is the transaction fee probably applies before the tax no? If so the tax wouldn't affect firms earnings But I guess it depends how it's structured. That I don't know Either way tho I still think it's too small to be a big deal to typical investors. It's really the day traders that are buying and selling all the time that get hit with this and I dont feel sorry for them A good investor will often hold a stock for years. And dividend income shouldn't be affected by this tax either. Dividends is something speculators rarely get because they don't typically hold stocks long enough for that Link to post Share on other sites More sharing options...
Woolfsmck 2,763 Posted March 2, 2020 Author Share Posted March 2, 2020 1 minute ago, Economy said: Turns out it's 0.5% for stocks. 0.1% was for bonds And what I mean is the transaction fee probably applies before the tax no? If so the tax wouldn't affect firms earnings But I guess it depends how it's structured. That I don't know Either way tho I still think it's too small to be a big deal to typical investors. It's really the day traders that are buying and selling all the time that get hit with this and I dont feel sorry for them A good investor will often hold a stock for years. And dividend income shouldn't be affected by this tax either. Dividends is something speculators rarely get because they don't typically hold stocks long enough for that Well, its not a level tax .. and it will hammer certian types of investors … damaging the market as a whole.. its, not a small tax ... like a cat in a sil, I observe life, moving and still. My words give a clue,look inside to see whats true Link to post Share on other sites More sharing options...
Economy 52,931 Posted March 2, 2020 Share Posted March 2, 2020 1 minute ago, Woolfsmck said: Well, its not a level tax .. and it will hammer certian types of investors … damaging the market as a whole.. its, not a small tax ... It's ok I think at this point we can just agree to disagree here We think alike in a lot of stuff but I think it's fair to say I'm still a little bit more left than you even if I am a bit more to the right than most of GGD I enjoy our debates and we don't have to agree on every single thing Link to post Share on other sites More sharing options...
Woolfsmck 2,763 Posted March 2, 2020 Author Share Posted March 2, 2020 5 minutes ago, Economy said: It's ok I think at this point we can just agree to disagree here We think alike in a lot of stuff but I think it's fair to say I'm still a little bit more left than you even if I am a bit more to the right than most of GGD I enjoy our debates and we don't have to agree on every single thing Doesn't matter if your left or right … .01 tax on 'transaction' will impact certain investors more than others.. just pointing out a cause and effect of the proposed revenue policy …. Your opinion is fine with 'me' as it really doesn't impact my personal position currently .. . like a cat in a sil, I observe life, moving and still. My words give a clue,look inside to see whats true Link to post Share on other sites More sharing options...
Economy 52,931 Posted March 2, 2020 Share Posted March 2, 2020 29 minutes ago, HorusRa2 said: No but what it means is that investors will be much more calculated in their buying and selling. Or they take the marginal tax as a cost of doing business just like investors do. I think you're trying to say the transactions tax is a bigger threat to investor profits than it really is. Also, investors would actually know the math you just mentioned and instead of selling they would probably hold the stock that would cost them money to sell off in the first place or otherwise they would sell it and take the loss like any normal investor would. So again, if you're going to invest your money in something as turbulent and short-term investments like stocks, you have to accept the associated risk and not expect to only get rewards. Yeah... And by having to factor in that cost they are gonna have to think about whether or not it's actually a good investment Ur less likely to buy a stock because u expect some announcement to come the next day that may move up a stock so u can sell it for a 1% gain in a 24h period if the tax will cost u half of that. It will make day trading risks less of a trade off and riskier I don't consider speculators to be investors so I don't care if they are locked out of the market Again buying stocks is literally taking a small ownership of a Corporation and you become a small owner and valuations should reflect fundamentals In Principal it's not that different than if you own a small business in equal partnership with someone else and u decided to allow a portion to be sold to other people who wanted to be involved but then people kept coming in and out with money and affecting the companies value witn short term bets based on next week's production numbers or something the government said on tv. How silly and annoying would that be? They are not there to grow the company with u, they are annoying moskitoes in and out with dimes to try and ride every wave up and cash out when it goes a little down That's of course an extreme example because Corporations are so large that that effect becomes more diluded and the average person also does not hold enough in any specific company for it to represent their life business investment But in Principal the idea is the same and I suspect even some CEOs and Billionaires with large shares in companies and big investments find speculators Annoying Peter Schiff is a CEO and economist from Euro Pacific Capital and I like hearing his podcasts cuz he has some unique perspectives I like to hear (even tho I disagree with half of what he says)... And he's an example of a major relatively wealthy investor (he's not a billionaire but he's still quite wealthy) who openly despises speculators and the damage they do. He's said it countless times on his podcasts Link to post Share on other sites More sharing options...
Economy 52,931 Posted March 2, 2020 Share Posted March 2, 2020 23 minutes ago, Woolfsmck said: Doesn't matter if your left or right … .01 tax on 'transaction' will impact certain investors more than others.. just pointing out a cause and effect of the proposed revenue policy …. Your opinion is fine with 'me' as it really doesn't impact my personal position currently .. . I guess I just don't consider speculators or day traders investors Investors do serve a purpose in the economy. They deploy Capital in business investments they feel have the potential and fundamentals to grow. Companies with more growth prospects get more investment Capital Speculators and day traders think way too short term to care about fundamentals or which companies are more deserving of investment capital to grow etc. They are trading based on news and headlines they anticipate will move the market up and down the next day or next week I don't consider that investing and they don't serve any purpose in the economy. That's more like gamblers that decided to include the stock market as one of their games and they distort the market for everyone else I don't consider these types of "investors" that would be hardest hit by this tax to be a natural product of the free market. It's More like human nonsense Link to post Share on other sites More sharing options...
Lord Temptation 11,209 Posted March 3, 2020 Share Posted March 3, 2020 10 hours ago, Economy said: That won't do anything for people long term tho Really? I mean virtual currencies are more in line with the 24 hour economy. Exchanges start at 9 and close at 4. They’re so old-fashioned. I don’t think they will survive the digital revolution. Not to say they won’t always exist, just their functions and relative importance will evolve. Similar to libraries from 50 years ago to libraries today. Essentially all exchanges can be replaced by apps. In the short-term I think exchanges will stick around for a few more years, but over the course of decades they will become unrecognisable. Link to post Share on other sites More sharing options...
Economy 52,931 Posted March 3, 2020 Share Posted March 3, 2020 8 minutes ago, Lord Temptation said: Really? I mean virtual currencies are more in line with the 24 hour economy. Exchanges start at 9 and close at 4. They’re so old-fashioned. I don’t think they will survive the digital revolution. Not to say they won’t always exist, just their functions and relative importance will evolve. Similar to libraries from 50 years ago to libraries today. Essentially all exchanges can be replaced by apps. In the short-term I think exchanges will stick around for a few more years, but over the course of decades they will become unrecognisable. That's not what I meant lol I'm not saying they are gonna be useless to use as currency I meant as a growth investment long term. There may be surges of value now and wild swings cuz it's new and the market is trying to establish itself But I the future once it's stabilized, it will just be currency like any other currency. It will be cash not a rising asset with any dividends or whatever. It's not exactly what I'd call an investment Link to post Share on other sites More sharing options...
Lord Temptation 11,209 Posted March 3, 2020 Share Posted March 3, 2020 20 minutes ago, Economy said: That's not what I meant lol I'm not saying they are gonna be useless to use as currency I meant as a growth investment long term. There may be surges of value now and wild swings cuz it's new and the market is trying to establish itself But I the future once it's stabilized, it will just be currency like any other currency. It will be cash not a rising asset with any dividends or whatever. It's not exactly what I'd call an investment I think usage of weighted average composite indices like the DJIA, NASDAQ, FTSIE and ASX All Ords will collapse as they no longer represent “average risk”. They hardly are representative of the economy at all and people no longer trust them. As we saw with the “flash crash” and the rise of nanotechnology, these exchanges can and are being rigged by savvy hackers, both of the rogue variety and institutionally by online trading firms. They are no longer secure securities. Their risk profile is far greater than what they used to be. Nobody in their right mind puts money in the stock market with the intention to keep it there for beyond a year. Their future is with intraday trading. Link to post Share on other sites More sharing options...
Economy 52,931 Posted March 3, 2020 Share Posted March 3, 2020 2 minutes ago, Lord Temptation said: I think usage of weighted average composite indices like the DJIA, NASDAQ, FTSIE and ASX All Ords will collapse as they no longer represent “average risk”. They hardly are representative of the economy at all and people no longer trust them. As we saw with the “flash crash” and the rise of nanotechnology, these exchanges can and are being rigged by savvy hackers, both of the rogue variety and institutionally by online trading firms. They are no longer secure securities. Their risk profile is far greater than what they used to be. Nobody in their right mind puts money in the stock market with the intention to keep it there for beyond a year. Their future is with intraday trading. Ok ppl fear it now as they typically do near the end of a business cycle and when equities have high trading multiples and are overvalued The next time it crashes and gets reset investors won't be so wary of keeping things there for the long term Besides what's the main alternative? Digital currencies are still just currencies they are not gonna keep appreciating in value once they've stabilized... And we are probably gonna be in a era of low interest rates for a very long time which means fixed income likes bonds or savings accounts are useless junk That leaves the stock market and realestate as the main investments I don't think it's going anywhere Link to post Share on other sites More sharing options...
Lord Temptation 11,209 Posted March 3, 2020 Share Posted March 3, 2020 35 minutes ago, Economy said: Ok ppl fear it now as they typically do near the end of a business cycle and when equities have high trading multiples and are overvalued The next time it crashes and gets reset investors won't be so wary of keeping things there for the long term Besides what's the main alternative? Digital currencies are still just currencies they are not gonna keep appreciating in value once they've stabilized... And we are probably gonna be in a era of low interest rates for a very long time which means fixed income likes bonds or savings accounts are useless junk That leaves the stock market and realestate as the main investments I don't think it's going anywhere They won’t disappear but their importance will drastically diminish. We are in a post-growth world. There is no such thing as low risk in a complete market. The market itself is the risk. And the very definition of wealth has become so abstract that it’s lost all meaning. Maybe people will now start making art, and not just collecting it. Link to post Share on other sites More sharing options...
Economy 52,931 Posted March 3, 2020 Share Posted March 3, 2020 3 minutes ago, Lord Temptation said: They won’t disappear but their importance will drastically diminish. We are in a post-growth world. There is no such thing as low risk in a complete market. The market itself is the risk. And the very definition of wealth has become so abstract that it’s lost all meaning. Maybe people will now start making art, and not just collecting it. I dunno I don't see the stock market loosing it's important anytime soon. There would have to be a very substantial shift in the nature of the economy for it to significantly loose importance Link to post Share on other sites More sharing options...
Lord Temptation 11,209 Posted March 3, 2020 Share Posted March 3, 2020 1 minute ago, Economy said: I dunno I don't see the stock market loosing it's important anytime soon. There would have to be a very substantial shift in the nature of the economy for it to significantly loose importance Stock exchanges are highly centralised, hence fragile. I can see them becoming like payphones in the future. There but not really used or needed. Kind of just back up. I guess we’ll see... Link to post Share on other sites More sharing options...
Luc 4,776 Posted March 3, 2020 Share Posted March 3, 2020 Speculators are transaction costs themselves. These people make tons of money, are incredibly smart, but their job is to shift money around rather than creating new sources of welfare. These people could be innovators in Silicon Valley or whatever, and thus raise overall economic productivity. Even when these are automated, it means that smart people spent time coding complex trade AI programmes or whatever, and that these machines cost tonnes of energy, while these people are smart enough to otherwise be working on getting self-driving cars or a cure for cancer. So yeah, a transaction tax is perfectly legitimate, it should be just high enough to make the riskiest investors lose their job. Link to post Share on other sites More sharing options...
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