The Simple Truth

$34 trillion of stock value = $0 in real money

Investors want money, not value.

The Ponzi Factor is the most comprehensive research ever compiled on the negative-sum nature of capital gains (non-dividend stocks). The book is not a perspective or an opinion. It is a proof that is based on definition, logic, and it is supported by observable facts and history.

The simple truth is profits from buying and selling stocks come from other investors who are buying and selling stocks. When someone buys low and sells high, another sucker is also buying high and needs to sell for even higher. Companies like Google, Amazon, and Tesla never pay their shareholders. Their investors profits are dependent on the inflow of money from new investors, which by definition, is how a Ponzi scheme works.

About the Book

Fundamental ideas are easy to understand and influence many beliefs.

The legitimacy of the stock market rests on two fundamental assumptions. One is the idea that stocks are “equity” instruments that represent ownership. The other is the perception that stocks are “positive-sum” investment instruments, and investors win more than they lose. However, these assumptions have never been properly investigated, and it can be shown that neither are true.

The Ponzi Factor does not criticize the investment system. It proves why the features of the current stock market system meet the definition of a Ponzi scheme, and explains why even in the absence of insider trading, high-frequency trading, and highly improbable market crashes; the stock market is simply not designed for investors to prosper.

A stock without dividends is a Ponzi asset. It’s not how ownership instruments were designed to work historically or logically. This is not another story that will disappear after another market crash, it is an idea that will remain relevant for as long as the stock market exists.

What’s Inside


About the Author

Tan Liu was born in Beijing, China. He moved to the U.S. when he was six and was raised outside Washington D.C. Unlike his sister who finished high school and got a scholarship to MIT, Tan took a less traditional path and went straight into the working world. He was employed as a bike courier after high school and later supported himself through college as a freelance photojournalist for networks such as CNN, MSNBC, and Fox. In addition to his professional life, Tan also spent many years volunteering as a youth mentor in D.C. and Inglewood, California.

In 2006, he completed his undergraduate degrees in economics and finance from the American University. He has worked for two hedge funds and a trading firm in Shanghai, but spent most of his career managing distressed assets for a bank. He officially exited the finance industry in 2015 and is now finishing a master’s degree in applied statistics.

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6 days ago

The Ponzi Factor

This is an additional section that was added to Chapter 6 in the September 2019 update. It elucidates facts about stock buybacks.

Most #Stock #buybacks are scams because companies print more shares before or after the buyback. 59% of the firms that bought back stocks between 2009-2016 showed INCREASES in shares outstanding from 2004 - 2018.

A lot of dividends are false dividends that are tied to dilution.

In addition to the notable dilutors, there were also some extreme dilutors who engaged in false buybacks and had share counts that increased more than 6000%.

Employee stock compensation is a SCAM that is closely tied to buybacks. Some stock #buybacks are specifically designed to pay the CEOs who can print stocks for themselves.

Full video at: youtu.be/-XscM2GrKFU
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2 weeks ago

The Ponzi Factor

📚The Ponzi Factor will be available for FREE on Kindle this Thursday and Friday. Please note that the book was updated this September. Happy Thanksgiving! 🍁 ... See MoreSee Less

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2 weeks ago

The Ponzi Factor

📚 "The Ponzi Factor: The Simple Truth..." was a proof for why non-dividend stocks meet the SEC's definition of a Ponzi scheme.

The initial idea for “The Ponzi Factor: Slicers” was to make it an outline for debating finance junkies and address the common arguments they use to defend Ponzi assets. Those arguments are all forms of rationalization that use hypothetical/unprovable ideas or bias data. Their invalid arguments aren’t easy to spot (unless you’ve debated as much as I have), but they are finite and repetitive. Finance professors from NYU and kids with Etrade account all use the same BS to rationalize why Ponzi assets are ownership instruments.

At first, I imagined TPF Slicers to be structured like a Q&A. The book was going to outline the junkies’ arguments and slice through their bullshit.

BUT then I thought, “I’ve always had a fantasy about having a face to face conversation with Elon Musk, the Google boys, and Warren Buffett—talk about their Ponzi assets, etc. But that’s probably not going to happen anytime soon unless I kidnap them.”

AND then I thought, “Wait! TPF Slicers is a Q&A. I can just write about kidnapping Buffett/Musk/Sergey/Larry AND do the Q&A with them! The finance will be non-fiction, but kidnapping/interrogating my favorite people will be fiction. Beautiful!”

I will start working on Slicers soon and hope to release in 2020📚
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1 month ago

The Ponzi Factor

📚Renaissance Technologies is "the most" successful hedge fund in history. Their trading strategies are based on math, statistics, focused on the Ponzi factor, and probably used what are now considered machine learning techniques back in the 1990s.

Job qualifications for their Research Scientists: Experience in finance is NOT REQIRED.
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1 month ago

The Ponzi Factor

📚 Kimberly Clark beat earnings estimates with organic sales growth of +4%. Therefore the stock dropped -7%. 😝

Current dividend yield is around 3.2%. Not a Ponzi asset but The Ponzi Factor at work.

#investing #stockmarket #shortselling #wallstreet #NYSE #Nasdaq
#theponzifactor #ponziassets #FooledByRandomness #stocks
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