In the year 1792 the major first stock exchange was the New York Stock and Exchange board. Prior to this the 1st exchange was. Amsterdam Stock Exchange. It was established in 1602 by the Dutch East India Company (Verenigde Oostindische Compagnie or VOC) which issued the first shares on the Amsterdam Stock Exchange. It was the first company to issue stocks and bonds. It was renamed the Amsterdam Bourse and was the first to formally begin trading in securities. Overall the idea of a stock exchange is a group of people or an individual who believes in his idea, his start up and or his established firm and raises money from public. In case the entity goes up the ladder chain so does your investment and in case it goes down the chain, I need not tell you what happens with your investments!!
During these 400 + years of establishment of exchanges, there were ups and downs, funds were raised for wars, education, industries, energy, human capital itself and there was middleman everywhere. The 3rd party was either the broker who would introduce you to the world of investment and now the banks which have taken the place of brokers.
What are these 3rd parties and what do they do?
Their work is to tell you which investment is good and make you understand the working of the form /entity/idea you are investing in. Like in every basket of apples, not all are good similarly among these 3rd parties some may just bullshit around about the idea and make one invest. Sole reason being the commission the 3rd party gets to raise funds. With the advent of technology and internet these bad apples have sprung like mushrooms and are manipulating the market. But you too have access to internet and technology. Do your own research (DOR).
Getting back to the title, Ponzi scheme or not?. IF you DOR you will understand about how stock exchanges were earlier unregulated followed by proper setting up of people. The companies who launched their shares were either actually upto a definite idea or were just running around the bush to raise some money. Yes stock market was a Ponzi scheme in itself before people started adopting it and investing money in it. There was a wave of change which was due to mass adoption. Government did intervene and played their role. We opened our own exchange BSE in 1875, post which it was recognized by the Indian Government in 1957. That did put up barriers in the path of companies who were in the game to raise capital and ghost out, but it never stopped them.
Now can you see the connect. We are back to the 1957-1992 phase. We will see a 2000 happen soon and may be a 2008 too. But cryptos will survive. With this here are some more stock investment basics.
- Invest only if your investment money is not your bread and butter. You can loose it
- Withdraw your principal and play with your profits.
- DO NOT take a loan for investment, especially in an unregulated market.
- There will be pumps and dumps, if you know that your white paper and invested company will deliver, hold!!
- Buy low, extremely low (a cent or a rupee). To buy low DOR (Do your own research).
- Technology is the way forward , so anything which brings in change, cuts the 3rd party and brokers, and cuts costs is worth a bet
- Gambling /casino coins are good, but too many casinos are already in the market. It’s literally a gamble
- If your coin goes boomerang 6 or even 10 times in a day, do not run around crazy. It has to get back to somewhere mid way.
- This industry is new and news is what makes everything rise or fall.
- Get your basics clear- Rise, Fall, Support Resistance, Elliot’s, Arbitrage, Fibonacci, Trend
- Keep definite realistic cash out targets. If the coin shoots above your target price, DO NOT GET GREEDY!!. Stick to the plan.
- Diversify based on platforms and exchanges
- Always keep some base coins handy- Bitcoin(BTC), Ethereum(ETH), USDT and the exchange coin.
- Use these to take risk and grow on your short terms.
- Distribute your funds. Long term, midterm and short term.
- And stay strong.!!!