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post #9 of (permalink) Old 04-15-2008, 03:51 PM
Duner
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Join Date: Jun 2005
Location: Almont mi usa 48003
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Quote:
Originally Posted by Vash View Post
Unless I'm completely wrong about futures trading.. Lets go back to the original one, with the tulips.

GuyA wants to buy, plant, grow, and sell an expensive tulip. GuyB buys shares, pays money to GuyA. GuyA takes the money and uses it to buy and care for the tulip. Is that not investing capital in equipment?




Not tulips,
Tulip bulbs.

"GuyA wants to buy, plant, grow, and sell an expensive tulip...."
Venture Capitalist provide equtiy for seed companies starting up. Not future or speculation trading.


GuyA ........ grows, and sells an expensive tulip...... GuyB buys shares, pays money to GuyA. GuyA takes the money and uses it to buy and care for the tulip.

Or GuyA has no motivation and does nothing and "Vests and Rests" = investing and resting.

or plans to retire anyway and saves profits.

or uses profits in other arenas with better profit return, like overseas investments.

or reduces production to inflate prices.

or has partners who take all profits as quarterly profit sharing.

or has plenty of expanded equity and saves profits.

or has little market expansion room left and so saves the profits.

or inflation and increased operating costs make increased production and investments forcasts unprofitable.

or sniffs coccaine and blows all his profits up his nose.



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