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openbox9
Premium Member
join:2004-01-26
71144

openbox9 to CXM_Splicer

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to CXM_Splicer

Re: What's the Problem?

said by CXM_Splicer:

They are done to increase the amount of money going to the welfare recipients (the shareholders) who feel they should be paid for doing nothing.

Nothing except for owning the business and investing resources to enable VZ to deploy FiOS and build its LTE infrastructure. Silly owners wanting to be paid for their investments. This is a classic debate/misunderstanding between owners, management, and labor...just as I'm sure that you'll argue that owners and management are blind to labor's concerns.
said by CXM_Splicer:

If Wall St. disappeared tomorrow the sudden resulting increase in efficiency would boggle the mind.

That's great until a company needs resources from the equity or debt markets to grow and expand its business.
said by CXM_Splicer:

I spend 8 hours a day, 5 days a week doing what I can to lower the price of Verizon stock.

You don't seem to be doing a very good job in that endeavor.
CXM_Splicer
Looking at the bigger picture
Premium Member
join:2011-08-11
NYC

CXM_Splicer

Premium Member

Re: What's the Problem?

quote:
Nothing except for owning the business and investing resources to enable VZ to deploy FiOS and build its LTE infrastructure. Silly owners wanting to be paid for their investments.

Hmm, you seem to be forgetting all the capital that was 're-directed' from Verizon to build VZ Wireless in the first place... and the profits from VZ Wireless that get re-invested. If you think someone buying VZ stock from someone else is 'investing resources' you have a distorted view of what Wall St does. In today's world, buying stock amounts to buying a ticket at the horse race; nothing but a form of gambling. Only in this race, you get to take bites out of the horse as he is running.
quote:
That's great until a company needs resources from the equity or debt markets to grow and expand its business.

Well, there are many options there: A) With Wall St. gone, there will be plenty of money to re-invest in the business since it won't be going to pay the leeches. OR B) Alternate means of financing... ever heard of Venture Capital? OR C) The 'Free Market' system will dictate that if the business doesn't have the capital to expand... then it doesn't. Simple.
quote:
You don't seem to be doing a very good job in that endeavor.

Thats what you think!! If I wasn't working against the stock price, it would be up around $70/ share!! Of course, I am always open to suggestions of how I can get it even lower
openbox9
Premium Member
join:2004-01-26
71144

1 recommendation

openbox9

Premium Member

Re: What's the Problem?

said by CXM_Splicer:

If you think someone buying VZ stock from someone else is 'investing resources' you have a distorted view of what Wall St does. In today's world, buying stock amounts to buying a ticket at the horse race; nothing but a form of gambling. Only in this race, you get to take bites out of the horse as he is running.

Looks as though you are the misguided one. Owning equity in a company makes a person an owner. While buying stock in a company that isn't doing a new equity offering doesn't directly add cash to its coffers, it does bolster value for potential future equity offerings. Don't forget about debt offerings as well. As for buying a ticket at the horse race...I've never done well gambling over the long term, but I do ok with my investments.
said by CXM_Splicer:

Well, there are many options there: A) With Wall St. gone, there will be plenty of money to re-invest in the business since it won't be going to pay the leeches. OR B) Alternate means of financing... ever heard of Venture Capital? OR C) The 'Free Market' system will dictate that if the business doesn't have the capital to expand... then it doesn't. Simple.

A. Without equity and debt markets, there is no money. That's why a vast majority of private companies go public...to raise capital.

B. Where do you believe venture capitalists raise money? You don't believe that venture capitalists aren't more interested in squeezing money out of companies than equity investors in public markets? I'd much rather have public companies with financials reported on a quarterly and annual basis than private companies held and owned by those able to hide their interests from other investors.

C. Free markets are all about raising capital and expanding business models in environments where demands exist.

BTW, you lose credibility with the sensationalized label of "Wall Street" IMHO. Perhaps you can work "fat cat bankers" into your arguments as well?
said by CXM_Splicer:

Thats what you think!! If I wasn't working against the stock price, it would be up around $70/ share!!

That's funny.
said by CXM_Splicer:

Of course, I am always open to suggestions of how I can get it even lower

Raise a huge sum of money and get a bunch of friends with the same, then short the hell out of the common stock. Continue knocking it down until it's bleeding. With a bountiful dividend, I wish you the best of luck. You won't get it much lower. Especially with the market value and large number of outstanding shares. Good luck.
CXM_Splicer
Looking at the bigger picture
Premium Member
join:2011-08-11
NYC

CXM_Splicer

Premium Member

Re: What's the Problem?

quote:
Owning equity in a company makes a person an owner.

Sorry, I still say it makes a person a leech. Owners actually contribute something to a business.
quote:
While buying stock in a company that isn't doing a new equity offering doesn't directly add cash to its coffers, it does bolster value for potential future equity offerings.

Exactly my point, buying (except an IPO or SEO) or owning of stock does not provide anything of value to the company except in terms of a strong showing at the charades party. Please explain how a day-trader who buys 200 shares of a stock then sells it 2 1/2 hours later because it went up $.32 /share is contributing anything to that company's production.

A, B & C... Actually money comes only from labor and production, not from shuffling it around. If you are referring to money being made available, my point is that there are other ways to raise capital. Even if the current model were completely eliminated, other funding options would be born if necessary. And the concept of the 'Free Market' has nothing to do with finding a way to raise capital for business that can't otherwise raise it. The fact that a business can't otherwise raise capital is a clear sign that the demand is not there. Working under a system that provides this capital despite lack of demand is akin to the role 'easy credit' played in the housing bubble. It is a detrimental manipulation of the free market performed by those that profit from it.
quote:
BTW, you lose credibility with the sensationalized label of "Wall Street" IMHO. Perhaps you can work "fat cat bankers" into your arguments as well?

Hmm, I didn't think pointing out the flaws in our public-company system was 'sensationalizing' but if you can use the term to ignore the problem then, by all means, go for it. The fat cat bankers are for another discussion but I will work in the 'fat cat CEO's'. You know, the people who get paid millions not for their ability to best run the company but rather for their ability to maximize the percentage of profits for the shareholders(and no those are not the same things). Shareholders are far removed from the concerns of customers and employees and suppliers and communities; they are concerned only with maximizing their own profits even to the detriment of the business as a whole. Shareholder primacy is a flawed model. This disconnect (a fatal one for the system imo) is not nearly as widespread in privately owned companies where owners generally have an interest in maintaining 'the business'. As this article points out, Verizon customer's needs are being discarded because the company is deciding to go with a 'more profitable' model... more profitable to shareholders. McAdam is proud of the fact that Verizon has moved from a utility to a highly profitable business (despite the fact that this has been done by screwing over customers and workers). He gets a raise, the shareholders get a raise but the customer and workers need to give back.

Unfortunately you lose credibility by being a profiteer in the system you are defending (Re: "... I do ok with my investments." and it is quite obvious that you are willfully ignorant of the problems this system suffers from.
openbox9
Premium Member
join:2004-01-26
71144

1 recommendation

openbox9

Premium Member

Re: What's the Problem?

said by CXM_Splicer:

Sorry, I still say it makes a person a leech. Owners actually contribute something to a business.

Call it whatever you want. I'll go with the legal definition.
said by CXM_Splicer:

Please explain how a day-trader who buys 200 shares of a stock then sells it 2 1/2 hours later because it went up $.32 /share is contributing anything to that company's production.

Daytraders are such a small, irrelevant part of the market, I'm not sure why you're bringing them into this.
said by CXM_Splicer:

If you are referring to money being made available, my point is that there are other ways to raise capital.

And my point was highlighting your misguided belief that alternative sources of capital would exist without a broader market to pull from, or that alternative sources would somehow be altruistic in nature.
said by CXM_Splicer:

The fact that a business can't otherwise raise capital is a clear sign that the demand is not there.

So, you're suggesting that debt markets are the only viable place to raise capital? Where do debt markets get capital from? Hint, investors.
said by CXM_Splicer:

Working under a system that provides this capital despite lack of demand is akin to the role 'easy credit' played in the housing bubble.

Where is the lack of demand? Perhaps I missed that in our discussion.
said by CXM_Splicer:

Hmm, I didn't think pointing out the flaws in our public-company system was 'sensationalizing' but if you can use the term to ignore the problem then, by all means, go for it.

I'm not ignoring the problem. Wall Street is a street. Its a convenient name in the blame game...nothing more. I don't see anyone hating on Chicago for its option markets, or any of the futures markets where the real power to do damage in the markets exist.
said by CXM_Splicer:

but I will work in the 'fat cat CEO's'. You know, the people who get paid millions not for their ability to best run the company but rather for their ability to maximize the percentage of profits for the shareholders(and no those are not the same things).

I believe pay for management teams should be based upon performance. No exorbitant pay packages without proving themselves and bettering the companies. Can we agree on that one point?
said by CXM_Splicer:

Unfortunately you lose credibility by being a profiteer in the system you are defending (Re: "... I do ok with my investments." and it is quite obvious that you are willfully ignorant of the problems this system suffers from.

That's funny. I'll assume you don't have a pension, but you don't have a 401k? You don't have an IRA? You don't invest in a mutual fund? You don't have any savings for your retirement? Unless you spend everything you earn and you have absolutely zero savings, you're part of the problem with me
CXM_Splicer
Looking at the bigger picture
Premium Member
join:2011-08-11
NYC

CXM_Splicer

Premium Member

Re: What's the Problem?

I bring up day traders to highlight my point about how stock buying/selling/ownership is completely meaningless in the daily operations of a company. I think we both agree that the only useful purpose stocks serve is as one possible method of obtaining new capital for a business. I still think it is fairly obvious that if this avenue of funding were eliminated, others would fill in the gaps. Although you think this belief is misguided, you have offered nothing as an explanation of what would prevent such sources from materializing given the dynamic nature of the system. I also never suggested that these sources would (by default) be altruistic... but I know the one we are discussing now certainly isn't.

I am not saying that debt markets are the only option that should be available, nor that the complete elimination of equity markets would be required... I am saying that the current implementation of equity markets is flawed. I never said Wall st. has to be eliminated... I suggested that if it were, the majority of businesses would be better off. And you are right... Wall st. is only a convenient name for the problem. It happens to be where this current problem (related to the thread) is centered but there are other problems too: futures trading (as you mentioned), certain commodity trading (food, oil, currency, et al.) We can discuss those problems when other threads present the opportunity.

To be technical, the 'problem' in the immediate would be made much better (perhaps livable) by moving from shareholder primacy to stakeholder primacy... and possibly requiring public companies to match each dollar paid as a dividend with a dollar to stock repurchase. Even you must admit that the constant siphoning of profits (with nothing in exchange) is detrimental to a company. Maximizing those losses is even worse.
quote:
I believe pay for management teams should be based upon performance. No exorbitant pay packages without proving themselves and bettering the companies. Can we agree on that one point?

Yes, certainly... I agree with that in principal. The only particular would be in our definitions of 'bettering the companies'.
quote:
That's funny. I'll assume you don't have a pension, but you don't have a 401k? You don't have an IRA? You don't invest in a mutual fund? You don't have any savings for your retirement? Unless you spend everything you earn and you have absolutely zero savings, you're part of the problem with me

I do have a pension but its direction is totally controlled by Verizon. By the time I retire though (at least 10 more years), I doubt very much there will still be a pension the way things are going. Actually, I find it unlikely that I will still be there for 10 more years given Lowell's desire to contract our work out. I do have a 401k but I have very little choice in where the money is directed. I would certainly make socially conscious investments if the options were there. So yes, I am also part of the problem... but unlike you, I would rather change it than perpetuate it, defend it, and claim it our best or only option.
openbox9
Premium Member
join:2004-01-26
71144

1 recommendation

openbox9

Premium Member

Re: What's the Problem?

said by CXM_Splicer:

I bring up day traders to highlight my point about how stock buying/selling/ownership is completely meaningless in the daily operations of a company.

Given an instant in time, I agree with you. However, over the long term, the value of a company (share price is one component of computing value) is very important.
said by CXM_Splicer:

I think we both agree that the only useful purpose stocks serve is as one possible method of obtaining new capital for a business.

I will agree that a primary purpose of issuing stock is typically to raise capital.
said by CXM_Splicer:

I still think it is fairly obvious that if this avenue of funding were eliminated, others would fill in the gaps.

This is where I struggle with your argument. What's the replacement? How will it be any different than the equity markets that we have now?
said by CXM_Splicer:

To be technical, the 'problem' in the immediate would be made much better (perhaps livable) by moving from shareholder primacy to stakeholder primacy...

So you want to add labor's voice to the strategic decisions of a company?
said by CXM_Splicer:

possibly requiring public companies to match each dollar paid as a dividend with a dollar to stock repurchase.

To what end? To take the company private again? I won't dispute the potential value of stock buybacks (with companies on sound financial footing with strong revenue streams), I'm curious what you envision as the end state of doing so.
said by CXM_Splicer:

Even you must admit that the constant siphoning of profits (with nothing in exchange) is detrimental to a company. Maximizing those losses is even worse.

I assume you are implying that distributing surplus cash via dividend payments to shareholders is "siphoning profits". I believe owners should be paid for their ownership. I believe the BoD should do the right thing for the company by balancing distribution of cash with reinvesting profits for growth.
said by CXM_Splicer:

I do have a 401k but I have very little choice in where the money is directed.

That's a problem of the firm managing your 401k options. I believe that contributors shouldn't be limited on investing choices with their retirement funds. That system is broken and needs to be remedied.
said by CXM_Splicer:

but unlike you, I would rather change it than perpetuate it, defend it, and claim it our best or only option.

I'm not opposed to change, I just need to hear an option that's better than the current system. Until then, I will continue doing what's in my best interest given the system that's currently available to me.
CXM_Splicer
Looking at the bigger picture
Premium Member
join:2011-08-11
NYC

CXM_Splicer

Premium Member

Re: What's the Problem?

quote:
This is where I struggle with your argument. What's the replacement? How will it be any different than the equity markets that we have now?

To be perfectly honest... I have no idea what might replace them. But, as a for instance, if banks giving mortgages was suddenly discovered to be illegal, do you think home sales would stop forever? Of course not... the system would adjust and there would be alternate means invented. What are those means? I have no idea but the housing market is a basic necessity that WILL BE satisfied. Just because neither you nor I has the financial imagination to conceive of a replacement for the equity market doesn't mean it wouldn't happen.

Don't think of my post as a 'I have a great replacement for equity markets!!' it is more of a 'We have problems with equity markets that needs to be fixed.'
quote:
So you want to add labor's voice to the strategic decisions of a company?

To have a voice in the decisions would be an incredible step up IMO, but it shouldn't stop with labor. I would be happy even if the BoD treated labor, customers, community, (all the stakeholders) with at least as much concern (but ultimately more) as the stockholders rather than treating them as financial losses and potential income streams. As I am sure you are aware, there are successful Employee-owned companies... there are also successful co-ops (customer owned companies) so there is no inherent reason why the combination would be unthinkable.

To put it simply, I guess my problem is that public companies are more concerned with 'The Market' then with 'The Business'. The business should be primary... the market secondary (and treated like the 'potential source of funding' that it is). In all fairness, there is no way you are going to convince me that the shareholders (non-participatory owners if you prefer) are more important to a business than the customers or labor. So yes, the ultimate goal of a unity 'dollars to shareholders'/'dollars to stock repurchase' would be to take the business private where they can be more concerned with 'the business'.

I see putting the market first as detrimental to the system as a whole because it is restricting to business more than it is beneficial to it. The market is certainly beneficial to the BoD & executives who (presumably them) started the company IN ORDER TO MAKE MONEY (yes, I actually do get that) and, like you and I, are looking out for their own financial best interests. But then whats the answer? Is it that personal greed is responsible for the situation and it is un-fixable? Sorry, I don't accept that. True, I do have a financial interest at stake in my position (as do you in yours) but I am not prejudice in this thread since it relates to the customers getting screwed over.

P.S.
I thank you for your thought provoking exchange.
openbox9
Premium Member
join:2004-01-26
71144

openbox9

Premium Member

Re: What's the Problem?

I think that if mortgages were outlawed, the housing market would be decimated. The 50% decline from the housing bubble would be nothing. Supply would be huge, with minimal demand. As for a replacement for our debt/equity markets, yes, I'm having a hard time imagining an environment that allows a company (or even an individual) to raise capital without going to public markets to do so.
said by CXM_Splicer:

To have a voice in the decisions would be an incredible step up IMO, but it shouldn't stop with labor. I would be happy even if the BoD treated labor, customers, community, (all the stakeholders) with at least as much concern (but ultimately more) as the stockholders rather than treating them as financial losses and potential income streams.

I'll grant you that labor should have a voice in the strategic and operational decisions of the business. Customers' voices are their wallets. And the communities have voices with their regulatory arms.
said by CXM_Splicer:

To put it simply, I guess my problem is that public companies are more concerned with 'The Market' then with 'The Business'.

Some, not all.
said by CXM_Splicer:

In all fairness, there is no way you are going to convince me that the shareholders (non-participatory owners if you prefer) are more important to a business than the customers or labor.

It's a balance.
said by CXM_Splicer:

I thank you for your thought provoking exchange.

You're very welcome. It's nice to have a civil debate and not be called names because someone disagrees with my views.