10 'Insane Things' Wall Street Really Believes

[IDemo]

Wall Streeters believe the darndest things, like the Earth is flat, the moon is made of green cheese and central bankers are the most powerful force in the universe this side of gamma-ray bursts. OK, so maybe they don't believe the first two things, but there seems pretty strong conviction about the third.

And that's not all—in fact, there's a slew of things pros on the Street hold as true that just don't seem to make a lot of sense, particularly to those on Main Street who get a close-up view of how the real world works. Josh Brown—the "Reformer Broker" blogger, financial advisor with Ritholtz Wealth Management and regular on CNBC's "Fast Money" show—has a Top 10 list that he's been kind enough to share. It lists some of the more bizarre, but true, beliefs that constitute "Insane Things We Believe on Wall Street." Beware: It's only slightly tongue-in-cheek and actually cuts pretty close to some of the myths of the financial markets:

1. Falling gas and home heating prices are a bad thing.
2. Layoffs are great news, the more the better.
3. Billionaires from Greenwich, Connecticut, can understand the customers of JC Penney, Olive Garden, Kmart and Sears.
4. A company is plagued by the fact that it holds over $100 billion in cash.
5. Some companies have to earn a specific profit—to the penny—every quarter but others shouldn't dare even think about profits.
6. Wars, weather, fashion trends and elections can be reliably predicted.
7. It's reasonable for the value of a business to fluctuate by 5 to 10 percent within every eight-hour period.
8. It's possible to guess the amount of people who will get or lose a job each month in a nation of 300 million.
9. The person who leads a company is worth 400 times more than the average person who works there.
10. A company selling 10 million cars a year is worth $50 billion, but another company selling 40,000 cars a year is worth $30 billion because it's growing faster.

http://www.nbcnews.com/business/markets/10-insane-things-wall-street-really-believes-n233241

[mindwalker_i]

1. I agree with #1, but for very different reasons

For #2, employees are costs. From that viewpoint, it makes complete sense that getting rid of employees is a good thing. The part of the equation that these people miss is that a major part of the business is to get things done. That often takes people. The other part being missed is that if all people are laid off, the markets disappear, and that is not good for business. In other words, business people are taking a very narrow view of what's good and what isn't, and that narrow view in cannibalizing companies from the inside. It isn't immediately noticeable.

[liberal_at_heart]

5. Some people actually freeze to death when they can't afford their heating bill. How is a lower

heating bill a bad thing?

[muriel_volestrangler]

8. Falling fossil fuel prices means more will be used, and efficiency measures won't happen

Hence more global warming. Find a way to get enough money to people to pay a basic heating bill, but to make it worthwhile for all possible efficiency measures to be taken - and for as much as possible to switch to renewable forms of energy.

[mindwalker_i]

10. If climate change makes the world uninhabitable by humans

a whole lot of people will die. Even in more moderate scenarios, many people will die - as in possibly billions. Having higher prices for fossil fuels will put pressure on markets to develop new energy sources which would help us get away from carbon, but lowering the prices for fossil fuels will keep that from happening.

[kairos12]

2. Number 1 WS Belief--privatize profits and socialize losses.

[Prophet 451]

3. And that's why I want to ban corporations

Corporations are a device to obtain individual profit without individual responsibility.

[Flatulo]

7. That's an interesting thought. There's no specific

legal recognition of a corporation in the constitution, although it would be tough to get around the idea of freedom of association.

I do prefer privately owned companies to public, though. They can operate without regard to Wall Street dictates. Bose comes to mind, since a few friends work there. They are privately held and tell Wall Street to fuck off. They make good products and a decent profit, and people like working there. I don't think they've ever had a mass layoff. Wall Street has been clamorring for them to go public for decades, and they steadfastly refuse.

[Prophet 451]

12. Freedom of association does not equate to legal recognition of that association

Private companies have a clear method to assign responsibility for the businesses wrongdoings. Corporations don't.

[hifiguy]

17. Yup.

Read Jefferson on "moneyed incorporations." 'Tain ''t good, Cletus.

[uponit7771]

16. +1

[hifiguy]

4. They should all be marched to the scaffold

and guillotined; their families should be sold into slavery in Kuwait. And every penny they have stolen in the last 30 years, and all of their overseas holdings, forfeited to the US Treasury for redistribution to the deserving. Not even this will deter the greedheads but it would be a good start. Fuck the 1% They are a cancer on the planet.

[kairos12]

6. You capture my thinking exactly. Frog march them to the National Razor.

[Bigmack]

9. That's the problem with Liberals like you...

... you're SOFT on corporations and the .01% ers.

I'd take much stricter measures.

[hifiguy]

15. Tell me more.

That's the worst I could think of.

[Bigmack]

18. A couple of tours in Vietghanistan before the guillotine.... nt

[Tuesday Afternoon]

11. I don't think they believe anything except the rolling of the dice or the pulling of a handle on

a slot machine or the next horse race.

Wall Street is legalized gambling, nothing more.

Maybe, it could be something or maybe it was once something better long ago

but,

in its current state it is nothing more than Big Mouths shooting off to see who can yell the loudest.

[joshcryer]

13. 10 is a misrepresentation.

People are hedging on Tesla having a monopoly on electric cars, they already have a monopoly on electric charging stations, have released their patents on the technology to maintain that monopoly, because they are about to open a battery mega factory that will power all electric cars in the future that use the non-patented (or license free) technology.

The US energy roadmap is to be all electric by around 2050, if Tesla succeeds, then stocks in Tesla will be well worth what they're being bought up for. This is not to say that it's not overpriced, as Elon Musk himself has argued that. But if the plan for the US's energy future pans out, it's a safe investment.

[Nye Bevan]

14. 10 is entirely reasonable.

Growth is like compound interest.