Monday, June 26, 2017

Volume Three: Number Twenty-Six

La Persistencia de la Memoria
Salvador Dalí

See the Scam?
I'm starting a company, so I'm going to put my own money into this company, say $100.

Over the years, I sweat and save, returning all the profits back into the company, so it can buy equipment and expand. In a few years, I double the value of the company to $200 in equipment.

Simple. Now let us add future profits of $100.

Next, let us say, I'm getting old, so I decide to sell the company. Potential buyers come in, inventory the equipment, look at the future profits, and give me $300.

Coool, I have made a $200 profit on my labors.

Now, let's say, I'm not retiring, and I want to expand, but I don't have the money.

I can get the money several ways. One way, I go to the bank and apply for a mortgage. Needless to say, the bank will only give me money for the stuff that I own, so I can only borrow $100. (Most banks are conservative, so they want collateral or stuff they can sell "If" I default on the loan) Of course, the loan will be paid back by using profits that the company generates through sales.

The next way, that I can get money is to issue stock. Since the equipment and future profits are 'worth' $300, I can sell $300 of stock, but I don't want to do that, so I only sell $200 of stock and keep $100 of stock. (Three shares)


Let's add some complications by issuing a dividend, for every $100 worth of stock (one share) people get $1, a 1% return.

So, ... All the stock is 'worth' $300, but it gets better. As the business expands, by using the $200 to buy more equipment, the company becomes more valuable. To keep it simple, for every $200 of equipment the company adds $100 of future profits will be created.

This makes the company worth ($400 worth of equipment [original $200 + $200 bought from the stock sale] and $200 in future profits) $600. Since the stock was originally worth $100 per share, it is now 'worth' $200 a share,

And, ... Don't forget that $1 dividend, for every share.

Simple, isn't it? So, let's get a little more complicated.

The company wants to keep each share 'worth' $100, so they do a split. Now, everybody that had a share for $200 has two shares worth $100. No loss of money. Plus, they are still getting a $1 dividend for every $100 share.

Next, someone sells a share for $100.50 (notice the 50¢). Since someone sold their share for $100.50, the company is now 'worth' $603. Next, someone sales another share for $101, so the company is 'worth' $606. Next, to be a little more dramatic, someone sells a share for $200, so the company is 'worth' $1,200.

Notice, nothing has changed. There are still only six shares. The company still only owns $400 of equipment and has $200 of future profits. Plus, the dividend is still $1 per share.

 But, ... What happened to the value of the stock?

Nothing, except folks believe one share of stock is 'worth' $200.

O.K. ... Something did happen. People talked up the company, the potential for growing future profits increased, another company is buying the business for a premium, the company is deciding to raise the dividend, or some other announcement or action that effected people's perception of the company's value was made.

Almost lastly, the company wants to keep the value of each share at $100, so they split the stock again. For every share, a person now has two shares, so there are 12 shares with a $1 dividend.

Since I still own my original share, I now have four shares 'worth' $100, $400, plus the $1 dividend for each share.

Pretty simple? Right?

Now, I turn around sell my four shares, pocket $400, and still get to keep all the $1 dividends the company has sent me over the years. Plus, I may still be working for the company as a leader, manager, or consultant, thus still getting a pay check.

If you're still here, you also know that stock prices can go down, so I could loss money, go out of business, or some other catastrophe could happen, losing my financial security.

 Either way, some folks have decided they can make a profit a different way, really hundreds of different ways.

That's where the scams begin.

Doom and Gloom



'Black' Bears

Car Crash

Dr. Evil









Things You Might Want to Think About

Dang, ... Batteries are going to get expensive

Three villains have been arrested for stealing ... food.

Just think what would happen when folks are really hungry/

Big Deal


I am learning about the 'Laws of Thermodynamics,' from some colleagues at work.

It's Here!
Just to make sure, you and your family understand that the 'troubles' in Europe are here, too.

The Last One
I would like to make a prediction.

This will be the last manned fighter jet these United States will ever buy. Because in the near future, remotely-piloted vehicles will be the norm for well equipment countries and their militaries.

Mediterranean Diet
Dang, ... Olive Oil is going to get expensive

Nothing Good
Listen very carefully, ...

Nothing 'good' happens after 10 pm, so parents keep your children home after dark.

One of 'Them'
Folks, when you and your family are planning to flee, make sure you pick a place that looks, acts, and sounds like you and your family. 'Cause if you don't, a crazy 'white' guy might try to kill you.

As a side note:
Terrorism is defined as the use of violence in the pursuit of political aims.

So, ...

The first two attacks were terrorism while this attack was ... a crazy white guy, maybe.


These United States' military wears uniforms for various reasons. One of these reasons is to tell the 'friendlies' from the 'enemies.'

So, ...

Remember that when you, your partner, and your 'group' starts thinking about what to wear during an event, you might want to stand out.


"The more I write on topics like this, the more convinced I become that there are very few problems we face as a country that have easy answers, and very few controversies that have simple causes."

"It was also discovered that when guns are used in self-defense the victims consistently have lower injury rates than those who are unarmed, even compared with those who used other forms of self-defense."

"Denial may [be] getting a bit harder these days."

"Is this part of the master plan of Colorado; decriminalize marijuana to free up room in jails for people who sell smartphones to preteens or refuse to provide monthly paperwork (which will require additional taxes to pay the people who have to process that stuff)?"

"This might be a shock to you Ladd, but I too an concerned about this country’s apparent descent into the type of madness we’ve been seeing."

"In the near future, if you want human service, you'll have to pay extra - if it's available at all"

What Others Wrote

Ace of Spades HQ: The Morning Report, 6/22/17

Defense One: The D Brief, 22 June, 2017

Shall Not Be Questioned: Weekly Gun News, Edition 60

The View from Chaos Manor: 17 June, 2017

Yer Ol' Woodpile Report: Index 483

That's Just the Way it Was: Winslow, Arizona. (ca 1943)

An engineer climbing into the cab of a diesel freight engine in the Atchison, Topeka and Santa Fe Railroad yard

Indian laborers at work in the Atchison, Topeka and Santa Fe Railroad yard

Indian laborers at work in the Atchison, Topeka and Santa Fe Railroad yard

Atchison, Topeka and Santa Fe Railroad diesel freight engine coming out of the roundhouse. The entire engine consists of four units, only two of which can be accomodated in a stall at the roundhouse or on the turntable

W.F. Leverenz, maintainer, at work on one of the units of the diesel freight locomotive in the Atchison, Topeka and Santa Fe Railroad yard

Engineer George Bertino in the cab of his diesel freight engine, ready to pull out of the Atchison, Topeka and Santa Fe Railroad yard

No comments: