Why World Stock Exchanges are JUNK
Most
people think to know how a stock exchange functions. This is error!
Here I will prove that not even bank analysts know anything about
shares, bonds and governments.
You
should learn that the first inventors of analysis of shares at stock
exchange are meant to be the US-Americans Benjamin Graham and David
Dodd, with their book "Security Analysis" of the year 1934.
However,
that idea is utterly wrong: A certain German with name Hermann Zickert
was first by writing the book "8 rules in the art of financing", issued
in the year 1924 already. And in his book "Analysis of shares by a
consultant in economics" of the year 1927, he wrote the first time about
a "Price Earnings Ratio". He made - as the very first human - a
distinction between earnings paid out in dividends, or kept back as
reserves, and he stated that Both must be taken into account, on a
long-term basis, and be compared with the costs of the
company, to come to a "Cost Income Ratio" and this again must be
compared to the price of the shares at stock exchange. So he stated some
sort of "Shareholder Value" as early as 1927.
Now
comes René Delavy and says, what Graham and Dodd and Zickert have
stated, is nothing but poor intellectual junk. Those people may today be
assumed to have been "geniuses", when in fact they were dealing with
the straw, they had in their brains.
Let's get through all arguments:
1. It
is true that one of the major facts to know: What a share should be in
true value, is the long-term accumulated and annual profits, in
comparisons with the price. And it is important to know, in what
connection can be put: Turnover, costs, gross profits, net profits,
dividends and long-term development of the prices at stock exchange.
2. It
is true that many people became rich with shares, precious metal, real
estate and name what you want; even flowers, seeds, maize and animals,
including their bellies.
3. It
is true that values at stock exchange are, today, one of the most
important things in this money casino, which seems to represent alone
our world today.
So,
I can understand why everybody thinks, that bankers, especially Swiss
bankers, are outstanding in consulting and performance, that Warren
Buffet and Bill Gates are admired cash-geniuses in speculation, that
Graham, Dodd and Zickert seem to be other geniuses, as were Adam Smith,
Keynes, Marx, von Hayek, Friedman - and all the rest of "geniuses in
economics" during past centuries.
Now, very sorry, all this is nothing but a heap of junk in intelligence and false awareness of reality.
Here the truth about economics and their basics:
1. How
long do you think that shareholder values will subsist in a world,
where energy and resources come to an end and illusions are the sole
matter driving to heaven?
2. How
hopeful, vital, essential and viable is a world, where cash,
coincidence, shareholders values and stock exchanges are all - and the
basics as nature and the future of our children nothing?
3. What
about a theory of cheapness, of eternal growth, of value in paper, in a
world where any child of ten years can know, that this ends after some
time, before the year 2025 has elapsed?
But
these are fundamental questions that you, dear Reader, would not accept
as true and would anyhow guess that you read here pure intellectual
junk. Right you are, and therefore it would be just, if you would go
down the drain, together with your shares and your feelings of
intellectual superiority.
A. Consulting firms are greatest Skunks in Economics - just as NGOs are Alibis for political VIP
Here
we come to the crucial matter: the accounting and consulting firms.
They are completely incapable, overvalued, neo-liberalistic and purely
profit-oriented. And they get for their "services" hourly rates in
astronomic figures, for zero or disastrous results. They "advised" to
death big criminal companies like International Overseas,
Chrysler-Daimler (loss 26 billion dollars), Enron, Worldcom, thousands
of dot.com and companies investing in phone-licences for billions, lost
afterwards completely, further victims were scrap-airlines like Swissair
and thousands of other firms, worldwide. The damage they arranged count
per trillions. Let's name them: Arthur Andersen, said best accounting
firm on the globe, got in bankruptcy after Enron paper-shredder affair,
McKinsey are nothing else but well-suited bluffers with ties, not only
by hunter-strategy with Swissair, recommending accounting and tax tricks
with complex theories in masses, also adopted by KPMG and
PricewaterhouseCoopers and other big numbers in world's consulting junk.
Well, I know about their practices since having been the best
accountant and consultant of the world some time ago. But CEOs could not
accept my person, certifying the real situation and not being the usual
arse-creeper - and so I was dismissed and had to give up, consulting
from now on only small firms, lawyers and local accounting firms.
Finally I went tired of cheating shareholders and escaped into
literature, wanting to have other people take profit of my knowledge and
experience. Get this here: Consulting firms confirm in their certified
reports, having seen Popes go over water. More of that stuff in one of
my next letters.
B. Now we come to the real thing - the investments business, before its downfall
Yes,
here we come to the pragmatic details, and you will read something, for
free, that not one of those intelligent papers would, be it today or
any time in the future, be able to formulate in this world of "experts"
that have nothing in their heads, but still make us believe that they
"know" everything:
- Shares cannot be valued
Shares
are just paper, pretending on it that you may own a part, say one
millionth of a big Company. Great! Assume you buy Coca Cola just after a
period of a very long increase in values at stock exchange, but short
before a fundamental collapse. Considering the future inflation, you
would never again see your money. Okay. It could also work the other way
round and you steel the money from the losers. This means nothing else
but: The whole markets in shares, bonds, treasury bonds etc. are nothing
else but one big Casino of Monaco - and always have been. In the long
run, almost no company subsisted but went down the drain sooner or
later. In between, all made the profits, the other marketers were
losing. That's all. More of intelligence and logics can never be found
in Stock exchange matters. And considering the final downfall of our
society when resources and energy get out, soon, these "securities" are
not worth the printed paper.
- Bonds and treasury papers of "guaranteed" security
Never laughed more! Security! USA is bankrupt but China finances the US
deficits with junk bonds, better known as US Treasury Bonds, of a state
that can pay back its huge debts only by further increasing the
nation's indebtedness. And this counts already today, considering all
debts, including bubble at stock exchange, real estate, chapter 11,
leasing and mortgages, national, states and cities debts, including all
private, old age and health care debts, to an amount, where each
US-American owes one million Dollars to the rest of this world. And this
is true for almost any state in this casino-world, where guarantees of
nations are less than fake. Values? Are you crazy, dear Reader? A nation
in bankruptcy can never again serve his debts, not better than any
private company could do - or a broke father trying to nourish his
family. That's high accounting, friends, of which not one analyst on
this world understands one percent of its total science - and can
therefore not measure the real extent of all future dangers. Jesus,
believe me: The average genius is duller than your little daughter's
dog.
- Financial analysis? One great bluff and a total illusion!
Price
Earning Ratio? Long-term charts, lines and scales of values? Highest
and lowest price during last 52 weeks? Valuation of companies by
"experts" of consulting firms? Geniuses in forecast? Expected turnover
in next quarter, year, 10 years or 100 years, same of profits, outcasts,
shit in brains etc., for being capitalized up to a "real" price, a
"truthful" value of shares and bonds? Analysis? From Goldman Sachs,
Merrill Lynch, CS or UBS, New York's and Zurich's
Bank Mafia? Nothing else but obscure billions-fusions and wealth
destructions in funds, insurances and your portfolio - initial acts
followed by deflowering and final cash-losing anti-fusions. Past showed
this and future will show!
Forget
it, once for all, dreamers! Remember: Swissair was still assumed to be
worthy several billions, when they had already an over-indebtedness over
15 billion Francs. On the other side, ABB shares were once value below 2
Francs due to asbestos-problems, although at those times the operating
profits were still over one billion a year - so today the value is 26
Francs. All bubble-items of dot.com matters in the 90-ies went in
billions when they had 3 employees and one abzocking CEO or consulting
banker, plus turnover less than one million and expected losses simply
reaching astronomical figures.
But
not one single editor of famous economic Journals, like The Economist,
Foreign Affairs, NYT, FAZ, NZZ or Junk of Economics have ever seen
coming any disasters - until they happened per thousands, since 1928,
and again in years 1999 to 2002 - and at the same time, from the year
1990 onwards, I have been writing my fingers sore, warning all
journalistic scrap, mentioned above, from this hype of a mental insanity
- believed by 100 percent of those "editing geniuses in economics", in
all boulevard-media of Murdoch, Berlusconi - and thousands of other
greedy tycoons. Jesus Google, what a funny reality you are believing in,
dear Reader! But it becomes worse.
- Hedge funds and other idiocies will end up in all imaginable disasters
The
first, Bernie Cornfeld, went down with his Fund of Funds with many
billions after the year 1960. Today, we have thousands of Cornfelds. All
those hedge fund stupids that believe to trick out "the market", not
seeing, that the next collapse at stock exchange will, this time, bury
trillions and no longer billions of values and thus be burying the whole
stock market under the greatest bluff of all times, exceeding
everything in financial disasters ever seen on Earth. Any sort of
special "Financing tools" of this sort are bound to blind us about dirty
tricks, leading by all means in a final disaster and overall loss of
all investments. That's mathematics, and not the junk of "economic" all
papers of the world are writing about, the Chief Editors of which have a
brain of 5 years' old children.
- Precious metal and other real values - perhaps
Assume that all analysts with shit in brains are right: China and India will grow and grow, become greater than USA, Europe or Russia.
What a stupidity? The cheapness of those countries must end up in a
huge collapse. Because they can't keep up workers and peasants to work
for nothing. Because others will not allow to be challenged to death.
And Russia,
with its reserves under the ground, is anyway the potentially richest
nation on Earth. So, all is a huge casino of wrong expectations, a house
of cards, falling in pieces any day. But gold, platinum, palladium,
silver and all the rest are going out soon, if eternal growth would be
true as valid theorem, and so those metals should be valued hundred
times higher than they are today.
- Oil and gas getting out - quicker than our brain works
Well,
this is the only stuff of value that in the long run will count, even
when all stock exchanges will be gone, down the drain, for ever. But who
will finally pay priceless energy? It will be taken by force of armies,
be it atomic power of nations or the flow of world's coming army of
poverty, on an emptied planet, when we come to the true effects of
today's idiocies in philosophies about economics, politics, ecology and
culture - and stock exchanges.
C. Conclusions of no value at all
Now,
forget anything you ever have learnt at dull schools or right-wing
universities of neo-liberalism and globalisation. Copy this article
here, pin it to all walls you find, go to dinner and wait for your
death. You don't deserve just one of my letters. Not one. It's time I
would stop with it. I am writing for crazy people with shit in heads,
instead of functioning brains - and don't even get paid for. Now, get
lost. I'm fed up of believers, possessing a head full of illusions,
whereas any newborn child has more potential intelligence than any
analysts at Swiss and US banks, or maniacs at stock exchanges, inclusive
their back-licking chief editors of blind economic papers, all over
this goddamn world-casino.
How
much are you willing to pay me, for this lesson? More than you pay for
the useless speeches of Trial-and-Error Greenhorn, Hilarious and Suck
Clinton or Killing-fields Henryk M Kissinger - and sooner or later the
ones held by Junk-brain Bush? It's time you give your cash to people,
knowing some matters about economics, dear Friend. You are broke already
this day, just as all hedge and other funds, old age reserves and the
nations of USA and China - however, only future will show, how right
this prediction was, written here, in the year 2007.
René Delavy, Berlin and Bournemouth
Author of "CHAOS" / "Power x Stupidity = Self destruction" / "Hit-Parade of most stupid politicians on Earth" / "PLADESNIEKANT"