Flame — HabitableZone

Flame » in reply to "Take away the middle class....

Getting "Rich"

The really RICH folks don't buy stocks, they create them. I've repeated this here at least a half dozen times. Investing in stocks for penny returns is no way to get rich. Sure if you have millions to throw around you can make some money playing, but even the rich usually get burned.

The creators of Facebook, Ebay, Yahoo, Amazon, Google et al. - these folks got "rich" on stocks they "created" for themselves which they would be able to dump into the stock market for the middle class to buy up - saving only voting stock, etc.

This is the way you get rich in the stock market - tens of millions, sometimes hundreds of millions of dollars of personal net worth is created in one clean IPO or any subsequent stock offerings.

The middle class BUY the stocks and can make some retirement money - but it's mostly chickenfeed. So the point is no, the rich buy stocks only when they want to take over a company. And most do this in order to CREATE more stock! Look at the public records of offerings and you will find most takeovers involve the consoldiating and reclassification of stocks and new stock offerings to "fatten" up the new board of officers. Then they can sell off their interests - and it doesn't even matter if they have destroyed the share value by their actions. They all walk away with the middle classes cash. ON then to the next company...the next buy out...the next stock offering. They keep that capital growing exponentially so they can reinvest in the next company so they can CREATE more stock. That's how guys like Murdoch made their billions. It's not that the companies they hold ever produce that much profit - it's rather that the stock market is exploited to generate wealth for these companies. Google is a picture perfect example of this.

The Banks like Citibank, or Credit Suisse First Boston and many others are needed to help distribute the stock in their "investment" plans.

I'll let you in on another big secret: Almost no one in the middle class actually intentionally buys these shares. These shares are bought by the banks officers - and put into investment, retirement funds, etc. that the middle class, the small and larger businesses put their money into. It's a sweet scam. Its a done deal even before the offering. The banks help these companies stuff these share offerings into a plethora of funds and establish a decent share value when the new offering is made. It's an art form to fill a fund with mostly worthless stocks and some that will make a return so that the fund performs a return...just barely.

Yeah, I know a lot about how to get rich with stocks - and buying shares of stock because you think it will go up../or "believe in the company"...sure as heck isn't one of them.

I do agree that revolutions are just around the corner if things get much worse. They wont start here though...but elsewhere. Once one nation rises up and overthrows the government it sets a bad example and suddenly its 1917 all over again.

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