Betting on the Engineers
dilbert.com
dilbert.com
Wow, that's a pretty sad statement. No wonder our economic system is so fucked up. We've got people out there investing in companies they'd otherwise prefer never existed. Then, of course, there are machines making billions of transactions a day in an effort to game the system. Unless people start investing in companies that they truly believe in, I don't see how this system can do anything but fail in the long run.
Luckily, there is a machine out there willing to sell it to you. An evil evil machine.
There are a reasons to sell a shares besides thinking that a company is bad. Sells are also sold to raise capital, this may of course be done by the company itself to raise capital for expansion or in lieu of a loan. This is precisely what an IPO is and companies will also do it post IPO if the cirumstances are right.
But individual or institutional stock holders may also sell it to raise capital even while thinking that the company is doing fine and will likely go up over the long run. If the money was invested specifically for retirement or college for instance, it will be withdrawn (the shares sold) for that reason. An individual or instution may also sell some shares to support diversification or to move to a lower risk investment class while believing the company is most likely to prosper. And of course its perfectly rational to sell your shares if you believe an overall market decline is coming, even if the intention is to rebuy those shares when you believe it is near the bottom
There will be plenty of people to buy stock in any major company without anyone necessarily believing the stock is bad.
Sad, though, yes.
This is because there is a lot of money that seeks to invest only in ethical business, so the prices of unethical companies are permanently depressed from their true value, and in the long term the return from their dividends should thus beat the average of the market.
It's scary how it almost made sense.
If they stop all of the oil immediately, they've already done damage that we'll be cleaning up for decades. They've probably destroyed about 100 billion worth of revenue in the fishing business alone over the next 10 years.
And will they be held liable? For causing 100s of billions of economic damage over the medium-long term, let alone the environmental damage? Of course not, because they have good lobbyists and 65% of congress is either corrupt or an idiot who thinks "drill baby drill" is all you need to know about energy policy.
Yeah, that's admirable. It used to be we cared about justice in this country, and now we just admire those who evade it the best while they're screwing us.
Your points are all well stated but he is quite funny ("nerdgasm"...come on). Otherwise - just add healthcare reform and Wallstreet debacle to your list and then build a bunker and never come out.
Also, you're totally missing the point of Dexter - it's about addiction and powerlessness.
You seem to think only the 'good guys' are worthy of admiration. Ethics and self-interest aside, I think it's perfectly acceptable to admire an impressive feat or trait, regardless whether it negatively or positively impacts you. Notice, he was not admiring the theft of billions of dollars, but the character trait behind the action.
My favorite quote on the subject is funnily enough thanks to J.K. Rowling; "He-Who-Must-Not-Be-Named did great things. Terrible! Yes. But great" -Ollivander
Does the Exxon Valdez experience support this theory? How about the IXTOC blowout in 1979, which lasted for 9 months and dumped way more oil into the Gulf of Mexico.
I ask because both of these were the roughly the same size (EV) or significantly larger (IXTOC) and their impact was much smaller than you've claimed. If their not relevant, why not?
So, what's the basis for your claim about the amount of damage?
It's still just offshore from the Mississippi delta, which will hopefully not be ruined. And I still think it's a little perverse to be cheering them on for the fact that our corrupt system won't hold them accountable.
I chuckled at that. Nice finish.
I can see how his "buy stock of evil companies" strategy might work, but typically you do that when the company is actually doing well, and not, say, when they're about to be curb stomped by the US government.
Also, his complaint about the "liberal media" is somewhat disingenuous, seeing as how he is part of the liberal media, what with the anti-corporate comic strip and the vegetarianism and the belief in affirmation and the whoa-hoy and the glaven.
But if you're really smart, you buy when they've just been curb-stomped but not killed, then sell after they recover and return to their prior growth curve. (This presupposes that the company does not die and has an upward sales curve.)
Of course, they've got the alternative energy division, which had $5 billion in sales in 2008. Pity it operated at a net loss, costing BP one and a quarter billion dollars.
Even so, the near future prospects of BP aren't terribly good either, what with the crashing price of oil, (good for us, bad for oil companies) the numerous civil lawsuits and (singular) criminal investigation resulting from the oil spill, and the prospect of a moratorium on offshore drilling, coupled with additional regulation.
This is also why non-professionals (like myself) should not make purely speculative investments. You really need to have a finger on the pulse of expectations, in addition to what's actually going on.
Basically I think he's gaming the market ;0)
At least for today he won 3.5-5% on his gamble depending on the exchange.
Plugged in some estimates if bought now and sold on August 1st with the same IV (implied volatility) at different price points assuming it goes back to it's normal trading range of 50 - 60. Profit per contract (% gain in parentheses - divided by current ask price of 214) at different stock prices for BP.
50: 187 (87%) 55: 479 (224%) 60: 852 (400%)
The risk of losing the entire premium of 214 per contract by Jan 2011 doesn't seem to likely and the risk/reward ratio seems to be favorable.
But he is right that BP is a good buy. The sad truth is that after the Bush years the law is so much in favour of oil companies and the federal courts are so packed with conservative judges, that it is doubtful that BP will have to pay much for this disaster. You probably do not remember but the Exxon Valdes case concluded just a couple of years ago and Exxon got away with paying a very minimal sum considering the scope of the disaster.
Since Obama has gotten more campaign contributions from BP (also from Fannie Mae and Freddie Mac) that any other politician in the US, at least we'll know who to blame if it happens.
Also, the whole thing will have very little to do with Obama. BP will pay according to the law on the books and the way judges enforce/construe that law.
Obama will probably campaign to change the law, but that will not affect the treatment of the spill because ex post facto laws are usually considered unconstitutional in the US. So the spill will be treated according to the law as it was at the time the spill happened.
Do you also admire the Wall St jerks and bankers for screwing people over with bad loans? Do you admire how 'clever' they were?
> I admire them in the same way I admire the work ethic of serial killers.
(edit: added word engineering)
It didn't add to his argument at all, and subtracted by implying that he's doing this more as an "f you" to liberals than out of any rational thought process.
EDIT: /me watches the downvotes prove his point about how some people's thought process can be entirely hijacked. Yes guys, the apparent devastation of the Gulf is entirely a product of liberal propaganda -- things are actually perfectly fine.
Is the Dodo bird also still alive and well?
They're talking like there's hundreds of thousands of gallons of oil in the Gulf or something.
Where do you get "minor accident" from "very, very, very bad"? He is just saying that the liberal media is, as it usually does (ratings anyone?) exaggerating the situation. It doesn't help either that mass media types covering this kind of problem are usually the sorts that have orgasms from hugging trees.
> As for Sun's downfall, Joy traces it back to the fact that the company's business changed, leaving much of its research in areas where Sun no longer had products.
He also blamed the business side for not doing a better job of selling what the technologists at Sun created.
"I think if you wound the clock back, I'd like to think that we invented stuff in engineering that could have been marketed better," he said.