Restricting stock prices to book value

Restricting stock prices to book value would be a potentially solid way to get rid of Wall Street’s negative extractive influence. At the next huge crash lock those lower prices in and tax away the difference on trades that exceed book value.

What about pensions and retirements? Reinstate and enforce them and make companies fund them out of current earnings. Retirements never should have had any basis in stock prices that were subject to speculation.

This would be a free transparent market. Calling the current system free is like saying a casino is free.

From the 7190 publicly traded companies I scan, only 1199 are below book value. So that wasn’t the real problem on the stockmarkets over the last few days.

And I don’t really have a problem when some stocks do, because some of them are great buys. When the markets were melting 2 days ago I bought some JinkoSolar. It’s still below BV along with a very low P/E-ratio as well.

The company has some debt, is very volatile, but I think a great buy for the coming years. And I really don’t see why our beloved governments should “block” a price at a certain low. It would only be an incentive for some companies to cook their books and present higher BV to cover for bad management.

1 Like

He-he, Junk Solar.
I may reinvest some of my Tesla gains into this great buy :smile:

And how do you know book value if there’s no “Wall Street” (i.e. part of it that gets paid to help investors discover that value)?

If a company is valued too much, feel free to short it and get rich, then reinvest your profits in undervalued and “socially responsible” companies. It all can be done without leaving one’s study.

Edit: I draw a quick one - TSLA’s going to $1xx, soon

3 Likes

You mean to the moon :wink: I actually hope that you are 50% right and we get a very nice dip (buy! buy buy!). This company is traded at P/B of 38,94 so it should crash like a maniac, but hey, it didn’t! See that little green bar from 2 days ago. Gotta love how big money is buying this one at dips. But if you actually want to be technical (I’m not, just buy and hold for years) you gotta zoom out. For the love of a long term up-trend.

1 Like

Just like I hope precious metals crash. Fair enough!

I see a triple top in your chart. Who knows who’s buying (for all we know, it could be one of Fed’s proxies or some other CB).

Here’s Elon’s other “pearl” looks awful from technical point of view. But to me a great buy-and-hold as well.

Great! Let’s add a forth one to it, and than a fifth one as well. Way above 300. There’s a head-and-shoulder pattern as well. But I really don’t believe in techs that much. I used to trade some of these patterns but they didn’t brought anything. I do watch on balance volume sometimes. Or just plan volume. I do try to buys dips, like as in Solarcity. These huge spikes in volume can be great if you want a stock already.

Do you trade anything? Stocks, ETF’s?

edit: I hope @Warren isn’t gonna flag these replies for going off-topic from his OP :wink:

1 Like

I hope so too. We’re already in “off topic”, but it’s possible to be off topic even in here.

I (mostly) buy precious metals and the miners, and in the both cases I’ve stopped seeing any method in their behavior since 2013. I’ve stopped trying to make sense out of it. Now I’m doing faith-based (value?) investing.

Warren, anyone who had a clue about what’s the real valuation could become the next .
But there’s only a handful of people who have that ability over a long time period. Tens of millions of others are just randomly guessing and buying overpriced (or selling underpriced) assets. The same goes for houses and anything else (although you won’t go poor if you buy a wrong brand of pretzels).
If it only were so easy, I wouldn’t be here trying to figure out what is might be that Polporene knows and I don’t.

2 Likes

Hi cool, hopefully not off-offtopic… I’m trading for several years know but I’m not an expert at all. I tried plus500, nasdaq and cryptocurrencies…

At the moment I have some stash left on litecoin but think about selling and going for maidsafe or maybe one of my favorite long stocks on the graphene mining market… Focus graphite… Maybe interests you too if you’re busy with metals etc… It’s still very small but i’ve done some research on them and it has a nice board of directors with each their own skills promissing for their business.

Forex is way to specialisezed for me and cryptocurrencies is just guessing I believe, I made huge huge losses on these two… Brrrrrr

Yeah, it can be harsh, and cost a lot of money. I’ve had some good luck with buying BTC. Plus500 I treid for fun, but they oppose my rule that I don’t want the risk of losing more than I invest. They actually offer CFD-trading and make money on the spread. I know they have some sort of protection, but when markets really go bad they might give you a margin-call.

I didn’t know that one. Traded in Canada is it?? I have a good amount of Maidsafecoin. Ethereum as well from the crowdsale. “Made” money on that last one, but only when I sell now, and I won’t until there’s a good rise up.

1 Like

I registered there in 2013 and was waiting for a chance to use it. Then when Mt Gox hit, they suspended trading until the opportunity was gone. I never went back.

Graphene: I already lost money on that and moved on to other money losing opportunities. :smile:

1 Like

I decided to quit the hedge trading, it’s not easy and buying guaranteed stops works only with bigger spreads making it even more difficult.

Yeah focus graphite is canadian but also available on european markets like frankfurth etc… Maybe it’s better to buy in euro and not canadian dollar but like I said I’m not a forex expert :slight_smile: this is also my problem when willing to buy some extra…

@janitor & @polpolrene I was thinking the same things. But as to the manipulation of bv- there is a limit there. 200% of BV minus any included intangibles could be a nice limit to capture approximate value and include reasonable speculation or valueation of intangibles- patents, contract values, good will- value of strategic patents etc. It would grossly under value some firms, but we cant know which ahead of time. But can know ahead of time that it would attenuate society wrecking crashes like nothing else. It would also stop the hollowing out of every aspect of society. And possibly make it easier to transition the big firms to full employee ownership.

I’m also negative on the graphene but I see it more as an oportunity to buy, at least if I can miss some money or sell something… Graphene has to start yet so don’t worry :wink:

This can be done already. Doesn’t has that much to do with book value IMHO. There are companies that are owned by the employees already. The real questions is: what would limiting the stock value below book value bring these days? I would say chaos only. People should be able to trade company higher or lower than bv. It shows how much they trust or distrust a company.

Btw, your plunge protection team is already buying JKS because it trades below bv :wink:

Just give it a reasonable ceiling like %100 above book value. It is a price control of sorts, but its more of a limit on gambling and a stability measure. Want to increase your share price past the ceiling or issue beyond it then move the ceiling by growing your business

Why gambling? I call it investing. Tesla is doing some great things in my opinion, and is trading way above book value. If your rule would be truth, Tesla would be fixed in price way lower. Why? What problem would that fix?

Tesla is an exception. Wall st money comes with endless strings. People like Romney control the street and he called Tesla a loser.Id rather see Tesla crowd sourced some how. Maybe the public’s share would be held unallocated, but the capital behind it put to use. I see the stock market in theory working better for small firms but rarely in practice. Better that large firms be converted to full employee ownership and delisted. Or convert the firm into a DAO, but do it in a way that takes care of present and past employees even as it devests them. I think big firms need to be subject to charter revocation which will happen automatically if they begin to act against the public interest.

I have the sense that stock holders almost never have a positive effect on a business. Its an ugly and direct means to convert money into raw power by increasing the percentage of stock owned. The stock holders make idiot ownership claims and the firm ends up being run from the rear view mirror
, they are like credit cards that can’t be paid off. The focus becomes the useless kind of profit. Is there a quicker way to weaken a business and turn it into a public menace?

We don’t even have accurate ways to get info on firms. If we could get rid of sponsored media we could have much better stability. Note, today the sponsored media is distracted by the deaths of two journalists for the sponsored media and Jeb Bush is saying more respect for paid liars. When the US gov was murdering journalists in Iraq that wasnt covered but now two possibly conspicious deaths are covered possibly to distract from market manipulation of the impact of sponsored articals meant to tank the market.

We have to stop tracking gain through DJIA and GNP. These numbers going up has reached a point where its bad for most people.

Crypto shares usually make all employees stock holders.

Regarding Junk Solar: What was down is up and vice versa. Jim G below explains it very nicely.
One of the Fed douchebags yesterday said no raise next month (like there will be a raise any other month!), so it’s a go ahead to the Wall Street to BTFD again.
I am (again) going to put my last cent in precious metals next month.

@warren @janitor Someone in this topic showed a graph of Jinkosolar while it was below book value and traded under $18. Can’t really remember that guy’s name… He made some very nice profits on his trade. Ohw wait, I do remember, it was me! :joy:

Feel free to post a non moving Tesla-chart to spoil my party. Price-to-book of Jinko is now at 1.34 btw. I still hold.

2 Likes

Haha, yeah, congrats!
But they still run a business based on most extreme form of government coercion and fraud (government subsidies and - more importantly - the corralling of the customers into solar energy).

The Green Robber Barron Inc.: just saw an article how their initial availability estimate for Model X which was posted on Twitter was deleted. Oops. Now it turns out that piece of crap will cost a lot more and ship later.

As long as the central banks are determined to continue doing everything they can to assist in mis-allocation of resources on the scale only recently thought to be unimaginable, the fraudsters, especially “green” will remain a nice investment proposition.