The Stock Market is a Ponzi Scheme. Fully explained.

The Ponzi Factor is the most comprehensive research ever compiled on the negative-sum nature of capital gains—the money people make from buying and selling stocks. Unlike other finance books, this book does not assume stocks are ownership instruments. It investigates the ownership assumption and asks, “Why are stocks ownership instruments if the owners never receive money from the companies they own?” Most people don't realize that profits from buying and selling stocks come from other investors. When one investor buys low and sells high, another investor is also buying high and needs to sell for even higher. Companies like Google, Telsa, Facebook never pay their investors. Their investors' profits are dependent on the inflow of money from new investors, which by definition, is how a Ponzi scheme works.

History shows that the association between stocks and ownership came through dividends—a profit-sharing agreement between the shareholders and the businesses they owned, which is also why all stocks paid dividends before the 1900s. The idea of non-dividend stocks is a new concept that came about over the past century. At some point, the academics and regulators decided it was okay for companies to issue stocks and avoid paying their investors indefinitely. But their acceptance of this new form of ownership—Ponzi assets—was through tradition (and possibly corruption), but not with any research or logic.

The sad truth is, people in finance do not study history and don’t know the difference between a value that comes from the exchange of money (a cerebral idea) and the money that is being exchanged (a possessable item). The product of this ignorance is a system and culture that treats Ponzi assets as ownership just because they’re printed by a company. It doesn’t matter if the company makes money, losses money, pays nothing, or prints as many shares as they want. If a company prints it, it’s ownership. This kind of shoddy logic doesn’t work in other industries, but it is the norm in finance.

[adhnanriyaz]

This felt like telling a kid Santa isn't real but to a 40 year old 😂

[MMTInvesting]

Also mention that companies can print new stocks, sell them for money they keep, and dilute existing shares.

[DRCE]

"Something's wrong with the world.
You don't know what, but it's there. Like a splinter in your mind...driving you mad." -Morpheus

[jenithmehta]

Wow, I had searched so much on the internet because I felt something was wrong with stock market, but nobody around me had recognised it. I am so amazed that so many people realise this. I am thankful to the creator of this video.

[JuanIslands]

I’m here because the thought suddenly came to me.

[kentheengineer]

basically the broker wins no matter if the investor is selling or buying

[evelynhampton]

How did I miss this... This was right under our noses

[TheProfessorFunk]

I was that 18 year old who was encouraged to invest their money. "Make your savings work for you". I was encouraged to not only gamble my money, but invest it in places that were against my morals, in mining, fossil fuels and deforestation. Then the market crashed. I gained nothing from that experience. No joy, no satisfaction, no tangible assets.

[Sachin-at]

I was wondering if the stock market is a pyramid scheme, and I found this. Well explained.

[DetaP]

This video deserves a million views, seriously interesting stuff.

[samuelreyes]

MY portfolio has good companies, however, they have been red all this year. This is my first year of investing and have been down 35% in the January sell-off, and now down 17% in this sell-off. I work hard for my money, so investing is making me nervous and sad. I don't know if I should sell everything or just sit and wait.

[Raj-ulmy]

Its a big scam and everyone who's playing in these so called markets are making these companies money that they don't deserve on top of the fees for these brokers. Its a scam

[BolivarArquitectos]

that is what I have thought , the stock market is a legal, regulated and well organized ponzi scheme, is like a machine never stops

[americancollapse]

Underrated video. This should have at least a million views.

[MashZ]

Lmao us in the 3rd world counties know it for like a decade. In my country the stock market crashed hard in 2011 and couldnt recover in 2 years. Everyone came to the realization that the "share" doesnt represent shit. The price goes however it wants no matter how the comapny is doing. Also the company took our money, wont be sharing any profit and the only possible thing we can do with this "share" is sell it to someone else

[MinuteFlipDoc]

I don't know why this doesn't have a few hundred million views.

[alishabazz]

Mann this is so true I’ve been tempted years ago but NEVER officially got into it.

[JFCotman]

Such a powerful video

I’ve been investing over ten years and few professionals explain it so well

This could’ve stopped @2:30 but kept delivering

Thankyou.

[davecohen]

Iv'e warning ppl about this for 20 years. Brilliant video and graphics.

[Tweetogreggieb]

Two thumbs up good content, verifiable by those in the know, great presentation, video and host recommended.