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Everything posted by Mo-

  1. Is insurance a scam?

    Insurance is a zero sum game. Insurance policies will always be tilted in favour of the insurer because they look to make a profit, which is only natural because they are offering the service of assuming your risk and then paying out based on that risk. It’s pretty much a commercialized of hedging. Big financial services companies actually sell each other insurance all the time in the form of interest rate swaps so that their risk positions end up neutral.
  2. just binged stranger things 2

    1. Show previous comments  5 more
    2. cubster


      So all episodes really are available? That's awesome. I went to download this first episode and saw the entire list and had a bit of a squeal but wasn't sure if it was all or just weird links lol

    3. Ishavemychesthair2


      Just finished season 2.  Well all but 6 minutes of the last episode.

    4. Mufasa


      I thought it was great.

  3. The Investments Thread

    It would by definition dilute the other shareholders shares too. The only way to dilute share ownership is to issue new shares to new investors. You wouldn’t see any loss in value as the new cash from investment would either be held as an asset or pay off other liabilities, leaving your net equity position the same. The only change that would occur is both you and the other fellow would have less significant stakes in the company.
  4. Salams folks. Over the past year and a half i've been studying business, and in particular i've been aiming towards finance. For about a year or so I have been using an online stock simulator, talking to investors (huge Arab ones and small uni graduate ones) and learning the basics of investments. I thought i'd make a thread where I could share my stock picks I choose on simulators, my notions towards risk and my attitude towards investments as a whole. To start out with I'll begin with some principles that I have learnt from my experiences through simulation, the classroom, talks with investors and common sense: 1. Have faith in Allah! And that whether you win, lose, or go bankrupt, it is all apart of his plan! 2. There is always risk. No matter what you do, how you do it, when you do it, every action you perform entails with it a risk, and the greater the risk the greater the reward. Just because a company is too big to fail, just because a country has the strongest economy in the world, it doesn't mean the risk does not exist. 3. Think how well an investment will serve in 10 years (courtesy of Mr. Warren Buffett), as opposed to the immediate future. It is no great secret that time pays off, and that the faster money comes the quicker it will go! 4. Don't become too greedy. This is the fastest way to lose money. 5. Optimise investments by hedging risk. For those of you who do not know what hedging is, it is the reduction of risk by giving up a portion of profit. 6. Have an exit plan! It is just as important to be able to leave the investment and cash in as it is to enter it. 7. Invest locally as well as internationally. It is a great feeling to see the fruits of your investments in the community around you. 8. Diversify your portfolio by having many small investments as opposed to few large ones. 9. Be cautious and learn how to leverage off incurred debt through smart post-investments. 10. Gather as much information as you can, about everything you can, so you have at least the slightest idea of the smallest of things, so your decision in what to invest in is more efficient. Investing is a learning process, and some learn faster than others, but if you stick to your principles and add in a little experimentation here and there, you are almost sure to succeed. At the moment I am running two portfolios (one is in recovery, haha), so I'll share with you the one that is doing good (it has a projected annual return of 31% and is pretty low risk), which the layout is the following: Company name (Stock symbol) % of total portfolio: x% This portfolio I have is predominantly based in the consumer food market and features room for liquid cash so the stocks can be sold. All of the stocks in this portfolio are longed stocks, which means, as opposed to shorted stocks, I believe they will increase in price and thus I am taking what is known as a bullish attitude, as opposed to a bearish one. This portfolio has performed well both under poor and fair market conditions (the presidential elections, recent problems in Cyprus, Greece, etc.) Here is the portfolio: These numbers are rounded so please excuse the 4% irregularity. I made this portfolio using $1000 dollars in the simulator, otherwise I would have diversified it even more. I chose to stick primarily in food due to the fact that people always have, always will need food. And I chose these companies based on their size and returns in previous years, their value chain and the worth of their supply chain. I left the seven percent liquidity so that if any investment went bad I could afford to buy out of it. The reason I did not short anything on this stock portfolio is because I could not afford it on a $1000 dollar budget to stocks relevant to these ones whilst still investing enough to warrant shorting other stocks to hedge risk. Now, although these investments are in public equity (i.e. they are in publicly owned companies), the same principles for investment apply to them as to private investments. Here are some links to sites you may find useful: I will be posting more here later, and if anybody has any questions please let me know. It would be great if any of you decided to start up your own portfolios on Yahoo or investopedia and post your success stories here! Perhaps we could even have a little competition huh?
  5. This questions goes beyond economics and more towards politics and the make up of a society. Each society has its own social contract defined by its culture whether enshrined in law or otherwise, but we have the capacity to discern between which systems have historically been more beneficial for mankind. People of course have their own definitions of beneficial and best, but from an economical viewpoint the free market has always been the best solution to nearly all economic issues. I read a study (forgot which one) about how in societies with ineffective government protection rackets thrive, because by default, due to the notion of a monopoly on violence not existing, violence also becomes part of the market. The result is people pay racketeers for protection (mafia or gangs) and they do in fact protect people from other racketeers because they have a financial interest. This same arrangement technically exists between people and governments in stable countries except the government has successfully monopolised the racket and call it taxes instead of extortion.
  6. There are some aspects of the economy that don't need to be laissez faire (police, army, etc)
  7. This already technically occurs to an extent. The thing with university places supply is extremely elastic and educational investment is already becoming a thing where people give student loans and apply financial analysis to them in order to supply a credit rating. Usually though people are only willing to finance people who're attending strong universities because they have the lowest financial risk, so inevitably universities with bad career prospects will simply cease to exist (University of Greenwich and Kingston for example).
  8. This is true, yet the government can provide a greater incentive for people to take these subjects. Say for example in British culture people didn't like maths, further financial incentive would tilt more people towards maths. There are ways the government can harness the free market because in the real world there isn't perfect information which is generally a requirement for a free market to exist. Students could be told "studying art history is a great career!" by teachers when in reality not that many people with art history degrees get the chance to work in anything meaningful. Has this information been available to them before they'd likely have made different life choices. University has several other benefits even professional qualifications like the CPA or CFA or CS can't fill (even though they can provide credibility). Firstly, they show an extended determination and interest in the subject, 3-4 years isn't a short commitment. Secondly, they show the student can interact with people from different backgrounds. Thirdly, they show, for the most part, some sense of independence. Fourthly, most students will complete a research project or dissertation in their final year, which in many degrees (e.g. Engineering or medicine) can require the use of complex practical equipment that costs thousands of pounds.
  9. I don't find fault with government funding of education if there is a shortage in the country of a specific skill set. But as you said there are far too many Mickey Mouse degrees and the current system of funding costs the tax payer far too much. Ideally elite universities would operate as non profits, use the profits from research they sell and invest that into giving scholarships to those from disadvantaged backgrounds. Also technically speaking, if Student X from whatever background has high grades and is granted a place at Oxbridge in Subject Y which has an expected starting salary of £Z,000 and the course costs £A,000 a year including living costs, then investors will be more willing to lend the £Z,000 to the student because there is an expected return. This would turn universities into places of professional education as opposed to places of seeking knowledge (as they traditionally have been), but now people are able to get that knowledge online for free so professional education is the niche that should be filled tbh.
  10. Last film you watched?

    make nachos at home by getting some tortilla wraps from the shops, brushing them on both sides with oil, chopping them into little triangles and putting them on a baking tray in the oven at 200c for about 3 minutes. You then want to take them out, flip them, and smother them in grated cheese and pop them back in for another 3 minutes. Before this you can either prep some guacamole or salsa for tasty dips.
  11. worker productivity is far higher when your workers are happier and healthier, which means you can create a better service and product than your competitors and thus profit more. Take this theory in reverse and the same thing happens, which means the minimum an employer has to pay an employee is a livable wage or else they'll find very few people willing to work for them.
  12. It is in employers self interest to pay employees a livable wage. Wages for unskilled labour have lots and lots of price pressures in both directions, but the most distinctive upward pressure on wages is providing a livable wage with the most downward pressure being competition. In the case of South Asian workers in the Gulf: millions of these individuals viewed the opportunity to work in the Gulf as far better to working at home. They aren't expected to pay rent, transport or food costs. The bulk of them are men going as contracted workers in order to receive a far more competitive salary than they would back in South Asia, with nearly all of their salary being sent back in remittances to their family members. In Pakistan for example the minimum wage is 15,000 rupees a month, which is roughly $1700 a year. In contrast, the average monthly remittance from the UAE to Pakistan is $320 million a month, which translates to approximately $3200 a year per Pakistani in the UAE, a roughly 88% higher wage. Bear in mind, these are remittances, so it is separate from whatever money they might spend in the UAE. Is this a slave wage? In the context that their family lives in Pakistan and their cost of living is that of a family living in Pakistan, it is the opposite. An unskilled worker in the UK on the other hand has to support the cost of living in the UK, so naturally employers will pay a higher wage.
  13. Random Islamic Questions

    No evidence that they did in the Qur'an or Hadith so it can't be said for certain.
  14. Minimum wage disincentivises hiring low skilled people. Say you're a manager at a construction company. Every person you hire will have hiring costs (health and safety training, registering them with HMRC, etc.). Naturally in this scenario, a worker willing to work longer hours is worth more to the company because you get the most out of those fixed costs. Thus it becomes cheaper to hire someone willing to work 16 hours a day rather than two willing to work 8 if you have to pay all the same hourly wage. Alternatively, it could simply be cheaper to go for the automated option which was more expensive than manual labour before, but now has become cheaper thanks to an increase in minimum wage. Your assumption is that everyone will keep their jobs or hiring patterns will remain the same. Yes but the green belt prevents houses from being built. Right now, only something like 2.27% of England is actually built on. If the government released green belt lands for development we probably wouldn't have a housing crisis. For us to run out of land we'd need like 45 times our current population and by the time that occurs we'll probably have interdimensional doors for people's homes. You brought up homelessness: in London 52% of homeless people are foreign nationals, of which 28% are EU nationals. Furthermore, since Romania joined the EU, Roma Gypsies have migrated to every major EU city and set up begging rings and gangs. Not all migrants are joining the labour pool.
  15. Poverty in the UK emerges namely down to luck, not working hard enough or bad regulation. How many people can answer a telephone and book appointments, and how many can build an aeroplane? Almost anyone can do the first task whilst very few can do the second, which is namely down to both luck and working hard. Then let's look at examples of policies like the minimum wage, migration from poorer EU states, drug policy and the green belt. Minimum wage makes it more expensive to hire workers who work less hours for example, because in order to make savings on a forced increase in variable costs you can only reduce fixed costs (cost of employing someone) or profit will go down. Most economists are opposed to minimum wage hikes, even those who trend more to the left. Migration from poorer EU states also includes homeless people and begging gangs. Without checks at the border we can't really stop Roma people coming, who often do operate begging rackets in UK cities. Current drug policy means users of crack, heroin and other substances could face a criminal record. How many employers hire people with criminal records? A CRB check with flags will make employment way harder to attain. Then the green belt. We are legally not allowed to build on land in the green belt or much of the countryside. The primary cost for building houses now is in fact land. Green belt policies force market scarcity which makes home ownership far more expensive. We also have low interest rates which excaberate the problem because people can use the cheap mortgages to leverage buying a property.
  16. Well the premise that 40% of wealth is owned by 1% of people is entirely wrong. In the U.S. income is firstly measured by household (the income of all people living in that household before tax), so it doesn't take into account the number of individuals in a household (which is why household income and per capita income are different). Secondly, in most cases, household income usually only measures salary. It doesn't take into account other ways that people consume (such as debt) or earn (such as through capital or real estate gains unless it is in the form of rent or dividends). You could then say "well you can still infer x% of households earn x% of income", which would be true, but from a single data set it is only true for any given time period measured, unless each household is tracked in the form of a longitudinal study (near-impossible without adjustments because the make-up of households change with people moving out, being born/passing away, etc.). To add more, measurement of household income doesn't track wealth (accumulated income) it tracks the income for that year. Something such as cashing in on stocks, selling a pension and inheriting would all likely push a household into the top 1%, for example: person x inherited a home and some financial assets belonging to their mother valued at $400,000, whilst they and their spouse earn $15,000 each a year working part-time. That is $430,000 and their household would be in the 1% for that year. Conversely, say Mrs. Tech Lady owns 10% (unrealistic but bear with me) of America's assets and lived alone, yet in one year accepts 0 dividends nor liquidates any of her assets and simply keeps all of her money in a corporation, she wouldn't even be in the bottom 1% of household income despite being the wealthiest person in history. However the data isn't useless because median household income is a reliable indicator for measuring how much the average household is earning for themselves. Wealth inequality in itself isn't inherently a bad thing. Poverty however is and the only true way to alleviate it is technological advancement. Every major drop in poverty in history has been thanks to technological advancement. The problem is that once absolute poverty is gone people will redefine it as relative poverty (in a society where everybody has a Lamborghini, if somebody doesn't then they're considered poor). At the end of the day getting wealthy is entirely down to luck: the right parents, right genes to motivate yourself to work hard and the right opportunities at the right time. Also remember the notion that for one to become rich another must become poor is one of the most often used fallacies by people with no understanding of economics, commonly known as a zero-sum fallacy.
  17. Sowell is pretty good on a lot of issues economics wise. Some of his views on society are pretty crazy though tbh and many of his views are deemed unorthodox. But Basic Economics is a pretty good book at explaining basic economic concepts (as the book suggests).
  18. The Investments Thread

    depends on your situation. If you expect to be earning a lot then pay off the debt, if not then invest.
  19. Listening to...

    This one is amazing
  20. The Investments Thread

    Very good. You're beating the market by 2.5% on the dollar which is a considerable margin.
  21. Listening to...

    you're such a meme lord hahahhaah I suppose I am too
  22. Random Islamic Questions

    Prostitution exists at all levels of society in all societies in the world throughout most of recorded history (I am unsure if there was prostitution in hunter-gatherer societies and early agricultural societies, but there probably were people who lived off their capacity to provide sexual pleasure). As to the topic itself, it is haram for certain. After all they're fornicating and if they solicit (many do) then they're enticing others to fornicate too. On the other hand if they have been coerced by gangsters or loan sharks (often is the case in poorer communities), then it is an entirely different situation as they aren't necessarily acting on their own free will. And Islam isn't a black and white religion, and in their desperation people turn to desperate measures, they are more than often products of circumstance. Whether or not Allah forgives them is entirely up to Him. One of the most notable Hadith with regards to ethics mentions how the Prophet (PBUH) told the story of a prostitute who gave a thirsty dog water from her shoe in order to quench its thirst, and how Allah granted her a place in Jannah as a reward. So to sum up: yes its generally haram, no we don't know if Allah will punish them for it. Generally speaking though as fellow human beings we should show sympathy for people in such situations, and where possible, try and alleviate their suffering.
  23. Listening to...

    Gorillaz are fantastic. Very representative of the shift in how we began to use computers primarily for entertainment in the early and mid 2000s with the whole idea of a virtual band.