What is the salient feature of wealth creation? (by Iqbal Latif)
In response to the question: " Sir, how can any nation become an engine of wealth creation? Please answer me in detail this concept of wealth creation on an individual basis too, it is very interesting. I want to become rich like Mark Zuckerberg. "
The wealth of a modern society is no longer reliant on natural resources, industrial production; it is a knowledge-based scientific service economy and if the human capital is not geared to service such a transformation, a nation or an individual will remain stuck in poverty.
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One aspect of this that occurred to me when reading this-- if you think that the way to improve the American economy is by attempting to create more manufacturing-- you are barking up the wrong tree!
Hah! You borrowed an article out of Newsvine.
The article does explain why Israel has advanced so quickly - technological progress.
Hah! You borrowed an article out of Newsvine.
"Borrowed"? Maybe...but 'borrowed" implies I have to somehow give it back!
Its an original article, so I actually just "seeded" it here...
The article does explain why Israel has advanced so quickly - technological progress.
True. Their technology is amazing.
(Although there are other reasons as well...).
Anyway, maybe its time for another seed on Israeli tech...stay tuned!
Anyway, maybe its time for another seed on Israeli tech...stay tuned!
OK-- here it is:
18 Israeli Firms Rocking Financial Technology
I just seeded the intro-- if you go to that seed you can click on the link to the original article to see some of the innovative stuff they're doing.
View Snapchat IPO, $500M is loses, yet it blows the socks of most IPO's.
Sounds like another ''tech bubble''.
I remember when Microsoft bought out WebTV for $300 million dollars. The creators of WebTV were three friends who were still all less then thirty years old when they sold the company and received $100 million each. A tech reporter asked them what was next for them, what were they going to go into in tech next. One of them (I can't remember which) said "I just got $100 million dollars. Why should I go into anything? I'm as rich as I could ever want to be. I'm retiring now." and he did.
They sold out at just the right point in the last tech bubble and it sure seems like another one is building.
One thing that resulted from the surge in development of tech is the number of millionaires it created--- and how rapidly it did so.
Another is their young ages. It used to be that the Forbes listing of the wealthiest people in the world consisted mainly of men in their 60s-- or older. Except for a few people who inherited their wealth, it took decades to accumulate that kind of money.
But recently, perusing the Forbes list, its amazing how many younger people are on it. (In fact there are a fair number that make Facebook's Zuckerberg look not so young any more...)
A tech reporter asked them what was next for them, what were they going to go into in tech next. One of them (I can't remember which) said "I just got $100 million dollars. Why should I go into anything? I'm as rich as I could ever want to be. I'm retiring now." and he did.
its a choice young successful entrepreneurs are faced with when their company takes off. Many just sell it-- and retire millionaires at a young age-- never having to work again.
Others stay with the company because they love working on it-- wanting to make grow even more.
And then there are some who sell it-- but instead of retiring for life start another new one.
I think a lot of them start another project because the love doing the creating. There is a line in the movie "Sabrina" where Humphrey Bogart says to his brother who asks him just how much money does he think needs and Boogie says "Money! Money is just a by product!"
Money is just a by product!"
As well as also being a buy product!
I think a lot of them start another project because the love doing the creating. There is a line in the movie "Sabrina" where Humphrey Bogart says to his brother who asks him just how much money does he think needs and Boogie says "Money! Money is just a by product!"
I have known a few wealthy people. For some of them, money was secondary. What really got them motivated was the sheer joy of creation!
the last tech bubble and it sure seems like another one is building.
It hard to say. (Much easier yo know whether or not it is actually a bubble 'till...much later!
This is one indication that gives some insight-- the P/E ratios. (Price to earnings). During the tech bubble (around 1999 or 2000 I think it was?) some tech stocks had astronomical P/Es. Now there are some that have reasonable P/Es.
Also a lot of those companies had no earnings.
I think there are probably a few tech companies that are pretty solid, and may still be good buys, but I haven't been following that sector. (I almost got back into Apple recently-- it would've been a good buy. But I decided I need to be disciplined, so I'm only buying things that pay good dividends-- 4% or higher, so I didn't buy it. And now its had a big run up)
The current Weltanschauung in the market currently seem to be to be a bit exuberant-- so maybe that spreading to IPOs like Snapchat.
The is currently a lively debate amongst the "experts" on the market on two relevant issues:
1. Many investors are exuberant about the market in general, but the question is-- is it over-done...or justified. "Over-exuberant"-- or merely justified optimism? Some say the current bull market still has a lot more upside-- others are predicting a serious correction.
Personally, I'm not sure....although I've become more cautious since the run-up, and anyway I've become much more of "stock picker" rather than closely fllowing the overal market.
2. Is Snapchat a buy? I've heard strong arguments on both sides. I don't know. And yes-- one factor in the pricing maybe be un-related to the company itself, & rather be due at least in part to the overall market optimism.
The current Weltanschauung*
________________________________________
* I have no idea what that means, but occasionally when commenting online I like to throw in some big words. Partly in a futile attempt to impress people-- and partly to see if anyone is actually reading the comment before responding. (And BTW, I haven't a clue as to what "salient" means either..Ha!
Wasn't there a movie, "Salient Green''....
"It's people! Salient Green is people!"
Power to the people!
(Even though they are really just Soybeans!)
"It's people! Salient Green is people!"
So said Charleton Heston.
LOL - Randy, you are starting to think in terms of movies like I do.
LOL - Randy, you are starting to think in terms of movies like I do.
In all humbleness that one was a very short putt.
True enough, but not every day can one sink a chip from a bunker.
Only if your green and named the Jolly Green Giant.
In the valley of the jolly...Ho! Ho! Ho!...Green Giant.
Damn I'm old.....
Wasn't there a movie, "Salient Green''....
Very punny!
Yes, Krishna, you are very articulate in being grandilquent.
Yes, Krishna, you are very articulate in being grandilquent.
Ah-- good to see that someone noticed the change!
(Previously I had been very grandiliquent when being articulate!)
Jim Cramer has a big following (which doesn't necessarily mean he's any smarter than anyone else). But he said some interesting things about Snapchat shortly before it IPO'd. (I didnt try to get any. Currently I'm allowing myself one speculative stock, and won't buy anything else unless I think its really exceptional-- all the rest all relatively conservative-- and pay dividends, generally 4% or higher).
Being retired, I'm into divided paying stocks and solid bonds....
But every once and a while I'll take a bit of a flyer on undervalued stocks. Ford, when it was at $1.50 was a super value. Wish I would have bought more, but it is what it is.
Being retired, I'm into divided paying stocks and solid bonds....
The conventional wisdom from way back, which still makes sense is that the younger you are, the more risk you can take. (If you're in your 20s and put a little money into the market every month-- and than lose most of it-- you have many years to re-coup your loss. But if you're retired, it pays to be safer.
There were even formulas for the percent of $ to put into stocks & percent into safe bonds-- based on age. Some older folks even avoided stocks at all-- being 100% in bonds.
The last few years with lower interest rates, some people are putting less into bonds, and substituting safer stocks.
I'm technically retired, but I occasionally buy something a bit risky (which usually pays no interest-- like a speculative tech or biotech).
Although there are exceptions, generally speaking the greater the potential upside (via price appreciation or high interest rates-- or both) the greater the risk. Lower risk things generally pay lower dividends, and have less upside.
IMO most of the lower risk stocks pay only 3% interest, or even 2% or less. (Of course if the stock goes up in value 3% in a year, and pays "only" a 2% dividend-- you're making 5%/year n your money. Now-a-days that's not bad...
"Of course if the stock goes up in value 3% in a year, and pays "only" a 2% dividend-- you're making 5%/year on your money."
Not if you want to realize your income - you would have to pay a capital gains tax on the increase, would you not?
Not if you want to realize your income - you would have to pay a capital gains tax on the increase, would you not?
I'm not an expert on taxes-- I have a great accountant and let him do it. I could be wrong, but here's what I seem to remember (a little U.S. tax law re: stocks):
1. Yes, if you sell a stock for a profit, of course the profit is considered income. However,at least in the past, there were 2 possible scenarios:
A. If you held it less than a year before you sold it, it was considered short term capital gains, and taxed at a higher rate. (That was an attempt at discouraging excess speculation).
B. If you held it a year or more, it is taxed at a lower rate.
2. Dividends: I believe you get a break on dividends-- they are taxed at a lower rate than your "regular" income. (?)
[I do know about 2 interesting special situations, see next comment].
[I do know about 2 interesting special situations, see next comment]
1. REITS. ("Real Estate Investment Trusts"). These trade like stocks. They tend to pay better dividends than regular stocks. I'm not entirely sure why, but if I'm not mistaken the company itself pays much less tax to the gov't than it normally would since its a REIT. The extra profit (from paying the gov't lower taxes) is passed on to the owner of the REIT as a higher dividend.
Often people buy them for their IRA's because their dividends are high.
One downside of REITs is because of the way they operate, they do much better when interest rates are low. When interest rate are high they generally don't do as well. (Interest rates are low now but are going up, so many people are selling REITs). I own 2 which I intend to hold-- in fact recently bought a little more of one.
2. MLPs. ("Master Limited Partnerships"). They pay what are really dividends but are called "distributions". And they are generally higher than those paid by stocks. They are mostly infrastructure. And this income is not taxed (until you sell the MLP). You could own one for decades and keep collecting income without paying any tax! (However, when you do sell them the tax you pay is very high-- all at once you pay tax on any profit from price increase in the MLP plus taxes on all the income you've received all the years you owned it!
So who should buy these? These are good for people who want to collect a nice income & who have heirs-- your heirs inherit them and if I'm not mistaken you never pay any tax (because you haven't sold it) and your heir doesn't pay any tax because they inherited it (unless they inher a certain amount-- I believe if they inherit under $500,000 they pay no tax. BTW, this is one thing very wealthy people do-- they own MLPs.
P.S: Three other things to know about MLPs.:
1. Don't put them in an IRA. (Anyway they are tax free so its not necessary).
2. At tax time you have to file a form called a K-1-- apparently its very complex, so people who do their own taxes might want to avoid MLPs.
3. Most of them are energy infrastructure-- oil & gas. There is a possibility that in a few yearss carbon fuels will become obsolete, plus you might not not to invest in that. Also they've moved up a lot recently, might be too expensive now.
I believe most of what I said is correct, but some may not be. I think that both Jonathan and Perrie know much more about these things than I do.....
Personally I think that fears of Fed'l rate hikes have pushed prices of some REITs down , some are oversold. The well managed ones (especially in a good sector) might still be buys...
Tremendous opportunity in manufacturing right now with the coming boom in automation.
Tremendous opportunity in manufacturing right now with the coming boom in automation.
You might be right-- I don't follow that sector.
However, I wonder if that boom has already happened? There's been a tremendous amount of automation in factories for some time now. Also, I wonder if people already know that and manufacturing stocks are already too expensive? I don't know.
(Of course what Trump does will have an impact. He says he wants to bring factories to the U.S. to create jobs-- but if they build new factories here, I bet they employ only a few workers-- and a lot of robots!)
And of course Trump backtracks on what he says anyway...
A while back I looked into robotics stocks. At the time much of the automation (robots) in U.S. factories was by Japanese companies, and it was hard to get info on the stocks.
Researching robotics I did buy iRobot stock-- unfortunately they weren't in factory automation. They make those automated vacuums and also military robots. I made a lot on that one, one of my best trades ever-- a double! (I haven't done anything near that since-- anyway, now I'm mostly into buying boring and relatively low risk stocks, mainly for collecting dividends...)
iRBT stock price chart
OMG-- I can't believe it! We're actually having a conversation that isn't about politics! How totally . . . politically incorrect!
And worse yet-- its an intelligent and interesting conversation.
And people are not focused on attacking each other or acting like 5 year olds!
(I admit it-- I instigated a lot of this. I hope I don't get a suspension for this!!!
Since you brought up politics Kirsh....Your sentence will be acting as spokesman for Gary Johnson.
Aleppo?
What is an "Aleppo"?
(Just practicing...
To bad this wasn't on the main page. Great seed.