I dont understand how Stocks work

[Jesus_ist_König]

I still dont get it!!!!!!!

Earlier:
PPL bought shares to help a business grow so that the business ideas become real, stockholders also became a part of the business, could vote, got some of the business earnings/dividends

Now:
ppl buy shares in stocks that dont pay dividends and most ppl arent that rich to buy that much stocks to have a vote in the business. In other words ppl just buy because they hope that other ppl also buy and that the value of the shares goes up

Its just not clicking to me??? I cant rationally understand it. How did we go from the early shares to now ppl buying shares that are worth "Nothing". We are buying NOTHING in the hope that other ppl also buy that NOTHING. I just want to understand that? Why do ppl buy nothing and hope that others also buy that nothing.

For example: I buy an Amazon share. Wow im part of that company but financial the "being part of amazon" is worth shit. Lets say nobody else buys that share and the value always stays the same, then even though i bought that share, I didnt make any money nor gain any benefit, i.e. I BOUGHT SMTH WORHT NOTHING

Im begging to understand this shit i dont get it
@ilovearcherqueen

 

[StellaFanboy]

Cause its abstract manmade nonsense

 

[Jesus_ist_König]

Cause its abstract manmade nonsense

Its not nonsense its just I want to understand how this even happened. Its just that I bought a share, now im part of a company but its still worth nothing and then other guys come and say "eyyy I also want a share thats worth nothing" i dont make any sense

 

[jayk11x3]

Its not nonsense its just I want to understand how this even happened. Its just that I bought a share, now im part of a company but its still worth nothing and then other guys come and say "eyyy I also want a share thats worth nothing" i dont make any sense

thats the point, it's not supposed to make any sense. It is just time wasting bullshit

 

[Jesus_ist_König]

thats the point, it's not supposed to make any sense. It is just time wasting bullshit

For ultra rich ppl I get it, cuz they want to be a part of a company or stuff, but for the average guy?? Like it makes sense since with etfs you make money, but you only make money cuz ppl buy shares, i just dont get it.

The only thing were it can make sense is "buy shares of stocks in which you know big companies or banks are going to invest in" thats the only thing, but the rest??? doesnt make sense

 

[ropemaxxer00]

if the company goes stonks you go stonks, if it doesnt go stonks you dont go stonks, simple enough for you?

 

[Jesus_ist_König]

if the company goes stonks you go stonks, if it doesnt go stonks you dont go stonks, simple enough for you?

Thats wrong. Lets say Nvidia drops a new gpu. Nvidia sells a shit ton of them and their inner worth rises, yet the price of the stock only rises if ppl buy more nvidia stocks. I.e. nvidias inner worth could go up but unless ppl buy nvidia stocks, the share worth doesnt change.

And here is the problem

What is the point of buying nvidia -regardless of the inner worth of nvidia going up- when nvidia doesnt pay dividends and you are only left with a paper saying "you own 0.000000000002% of nvidia"

you only buy nvidia cuz u hope others also buy it. Thats not the problem, the problem is we are buying smth fucking invisible!!! Like i would get it if it were cars and other ppl also want the same car and this results in the car price to go up, but the thing is if i buy a nvidia share, im buying fucking nothinggggg

 

[ropemaxxer00]

Thats wrong. Lets say Nvidia drops a new gpu. Nvidia sells a shit ton of them and their inner worth rises, yet the price of the stock only rises if ppl buy more nvidia stocks. I.e. nvidias inner worth could go up but unless ppl buy nvidia stocks, the share worth doesnt change.

And here is the problem

What is the point of buying nvidia -regardless of the inner worth of nvidia going up- when nvidia doesnt pay dividends and you are only left with a paper saying "you own 0.000000000002% of nvidia"

That is essentially what i mean mate

 

[Jesus_ist_König]

That is essentially what i mean mate

can you answer the black part?

 

[ropemaxxer00]

can you answer the black part?

No

 

[truthprovider1]

very simple explanation:
stocks = trust in company
company does good > trust rises > stocks get bought > stock price higher
company does bad pr move > trust lowers > people worry > don't buy / sell > stock falls

its like crypto. There was a "first block" but that doesnt matter anymore
basically the current stock market was built upon the old stock market.

 

[abr0812]

I still dont get it!!!!!!!

Earlier:
PPL bought shares to help a business grow so that the business ideas become real, stockholders also became a part of the business, could vote, got some of the business earnings/dividends

Now:
ppl buy shares in stocks that dont pay dividends and most ppl arent that rich to buy that much stocks to have a vote in the business. In other words ppl just buy because they hope that other ppl also buy and that the value of the shares goes up

Its just not clicking to me??? I cant rationally understand it. How did we go from the early shares to now ppl buying shares that are worth "Nothing". We are buying NOTHING in the hope that other ppl also buy that NOTHING. I just want to understand that? Why do ppl buy nothing and hope that others also buy that nothing.

For example: I buy an Amazon share. Wow im part of that company but financial the "being part of amazon" is worth shit. Lets say nobody else buys that share and the value always stays the same, then even though i bought that share, I didnt make any money nor gain any benefit, i.e. I BOUGHT SMTH WORHT NOTHING

Im begging to understand this shit i dont get it
@ilovearcherqueen

stocks were created to sell overvalued shares of a company to make the avg normie feel like he is a part of smthg

 

[Jesus_ist_König]

very simple explanation:
stocks = trust in company
company does good > trust rises > stocks get bought

Why do ppl buy the stocks

> stock price higher

company does bad pr move > trust lowers > people worry > don't buy / sell > stock falls

its like crypto. There was a "first block" but that doesnt matter anymore
basically the current stock market was built upon the old stock market.

 

[masai jumps enjoyer]

Greater fool theory - Wikipedia

en.wikipedia.org

 

[Jesus_ist_König]

Greater fool theory - Wikipedia

en.wikipedia.org

Good article but i still dont get it why ppl buy shares. Okay they buy it in hope for a "greater fool" that will buy it after them but why in the first place do they buy them?

 

[masai jumps enjoyer]

Good article but i still dont get it why ppl buy shares. Okay they buy it in hope for a "greater fool" that will buy it after them but why in the first place do they buy them?

i imagine that if shares were invented yesterday with todays rules noone would buy them as they are. todays stock market is fueled by the trust it has gained from the now distant times when it was actually supported by the considerable dividents the stocks entailed

 

[Jesus_ist_König]

i imagine that if shares were invented yesterday with todays rules noone would buy them as they are. todays stock market is fueled by the trust it has gained from the now distant times when it was actually supported by the considerable dividents the stocks entailed

bingo i think thats it, so to be clear the earlier stocks made sense right? Since you bought shares to finance a project and then got the dividends

but today its just the hope of another nigga buying the share

am i right?

 

[masai jumps enjoyer]

bingo i think thats it, so to be clear the earlier stocks made sense right? Since you bought shares to finance a project and then got the dividends

but today its just the hope of another nigga buying the share

am i right?

thats what i believe

 

[Jesus_ist_König]

thats what i believe

And to also get this right, the inner worth of a company has nothing to do with how the stock price will evolve right?

ppl buy stocks cuz they read in the news that nvidia will perform good but at the end of the day its not the companies performance but just the hope of "a greater fool" buying the stock after you regardless of how the company performs

right?

 

[fantamaxxer]

I still dont get it!!!!!!!

Earlier:
PPL bought shares to help a business grow so that the business ideas become real, stockholders also became a part of the business, could vote, got some of the business earnings/dividends

Now:
ppl buy shares in stocks that dont pay dividends and most ppl arent that rich to buy that much stocks to have a vote in the business. In other words ppl just buy because they hope that other ppl also buy and that the value of the shares goes up

Its just not clicking to me??? I cant rationally understand it. How did we go from the early shares to now ppl buying shares that are worth "Nothing". We are buying NOTHING in the hope that other ppl also buy that NOTHING. I just want to understand that? Why do ppl buy nothing and hope that others also buy that nothing.

For example: I buy an Amazon share. Wow im part of that company but financial the "being part of amazon" is worth shit. Lets say nobody else buys that share and the value always stays the same, then even though i bought that share, I didnt make any money nor gain any benefit, i.e. I BOUGHT SMTH WORHT NOTHING

you understand it, its just the economy is fake

 

[masai jumps enjoyer]

And to also get this right, the inner worth of a company has nothing to do with how the stock price will evolve right?

ppl buy stocks cuz they read in the news that nvidia will perform good but at the end of the day its not the companies performance but just the hope of "a greater fool" buying the stock after you regardless of how the company performs

right?

pretty much. Nowadays the fact that the company performs good does not mean that its stocks are getting more expensive in itself, but those stocks will get more expensive because people think like "if a company does good the stock will go up in price, i should buy those", inflating the price. The aforementioned belief was created and passed down to us from those times when companies doing good actually meant more property which meant naturally greater stock price because its supported by actual physical property (machines, tools, factories) which can be sold and converted into money

 

[Jesus_ist_König]

pretty much. Nowadays the fact that the company performs good does not mean that its stocks are getting more expensive in itself, but those stocks will get more expensive because people think like "if a company does good the stock will go up in price, i should buy those", inflating the price. The aforementioned belief was created and passed down to us from those times when companies doing good actually meant more property which meant naturally greater stock price because its supported by actual physical property (machines, tools, factories) which can be sold and converted into money

What about the stocks that do pay dividends? those still are good right? those still bring a worth

 

[masai jumps enjoyer]

What about the stocks that do pay dividends? those still are good right? those still bring a worth

pretty much all of them do, even the nvidia ones you mentioned. Its just that most of the time the dividents are negligible. Practically noone today buys stocks to milk dividents, its always the hope of finding the bigger fool

 

[_Nazareth_]

It cannot be that hard to understand

 

[Jesus_ist_König]

It cannot be that hard to understand

explain it then

 

[_Nazareth_]

explain it then

Yeah but you’re not buying nothing. stocks are a real ownership claim on a company’s future profits. Even if it doesn’t pay dividends right now, the company is still making money and reinvesting it to grow. The reason people buy is because they expect those future profits to be worth more later either through dividends or the company becoming more valuable, which in turn more people would want it and then you can sell at a higher price. A lot of rich people also borrow against their assets to avoid paying capital gains

 

[_Nazareth_]

Yeah but you’re not buying nothing. stocks are a real ownership claim on a company’s future profits. Even if it doesn’t pay dividends right now, the company is still making money and reinvesting it to grow. The reason people buy is because they expect those future profits to be worth more later either through dividends or the company becoming more valuable, which in turn more people would want it and then you can sell at a higher price. A lot of rich people also borrow against their assets to avoid paying capital gains

Anything else you want me to explain? It can’t be simpler than that

 

[Jesus_ist_König]

Yeah but you’re not buying nothing. stocks are a real ownership claim on a company’s future profits. Even if it doesn’t pay dividends right now, the company is still making money and reinvesting it to grow.

Okay and? What is the purpose of that ownership I dont make any profit?

If a company doesnt pay any major dividends and if im not ultra rich, then the "ownership" is worth nothing regarding financial growth

The reason people buy is because they expect those future profits to be worth more later either through dividends or the company becoming more valuable, which in turn more people would want it and then you can sell at a higher price. A lot of rich people also borrow against their assets to avoid paying capital gains

 

[_Nazareth_]

If a company doesnt pay any major dividends and if im not ultra rich, then the "ownership" is worth nothing regarding financial growth

“the company becoming more valuable, which in turn more people would want it and then you can sell at a higher price“ just imagine it like reselling, you buy something then sell for a high price that’s IT

 

[Jesus_ist_König]

“the company becoming more valuable, which in turn more people would want it and then you can sell at a higher price“ just imagine it like reselling, you buy something then sell for a high price that’s IT

I understand that but we are reselling with something invisible thats the thing. A share of a company as it is, doesnt benefit me in any way.
I.e. what fascinates me that we are buying worthless stuff in hopes that the greater fool buys it too