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The Ponzi Factor

The Simple Truth About Investment Profits
By: Tan Liu
Narrated by: Sean Pratt
Length: 4 hrs and 24 mins
4.5 out of 5 stars (3 ratings)

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Summary

"All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as self-evident." (Arthur Schopenhauer)

The Ponzi Factor is the most comprehensive research ever compiled on the negative-sum nature of capital gains (non-dividend stocks). This means, as a whole, ALL investors will lose money from buying and selling stocks. 

Most people don’t realize that profits from buying and selling stocks come from other investors who are also buying and selling stocks. When one investor buys low and sells high, another investor is also buying high and needs to sell for even higher.

Companies like Google, Telsa, Facebook never pay their investors. Their investors’ profits are dependent on the inflow of money from new investors, which by definition, is how a Ponzi scheme works. 

This book is not for everyone. If you are a finance junkie who wants to rationalize why companies don’t have to pay their investors and believe a system that shuffles money between investor can magically create more money than people contribute, then this book is not for you. On the other hand, if you understand that money doesn’t grow on trees and investors invest because they want money, not value, then you will learn something you will never forget: the simple truth about what makes a stock price move and the mechanics of how the stock market really works. 

A stock without dividends is a Ponzi asset. It’s not how ownership instruments were designed to work historically or logically. 

True ideas will never disappear. It can be covered, and we can get distracted, but the truth never goes away and becomes self-evident over time. The Ponzi Factor is not a perspective or an opinion. It is a proof that is based on definition, logic, and it is supported by observable facts and history. This is not a story that will disappear after another market crash. It is an idea that will remain relevant for as long as the stock market exists.                              

©2017 QuantStyle LLC (P)2018 QuantStyle LLC

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  • Nathan
  • 25-09-18

Eye opener. Articulate.

I knew something was wrong but I just couldn't put my finger on it. Tan Liu articulated it perfectly in this book. His argument is air tight leaving stock junkies nowhere to run.

You can pretty much back any finance major/stock junkie into a corner like I have once you read this book or give it a full listen. Truths don't go away, they stay and remain unchanged.

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  • Drew562LBC
  • 01-07-18

This book is a great investment of yout tme.

The author makes a lot of great points and observations. Very well written with clear and concise ideas regarding the stock market, a clear picture is painted. The definition of an expert is one who can explain the complex in understandable terms, Tan Liu meets this definition.

The truth really is simple after you see it. IF you take the RED pill and are still in the Matrix did you take the red pill and if you do nothing or do not know how to fight the system. I have wondered about some of these observations not as deep of explanations, some of these ideas are new and go further than I have made, yet I stay in the game. Just like Social Security, the Stock Market uses funds from new investors to pay those that got into the PONZI SCHEME earlier. Yet that is the system, I see the problem what is the solution? Till I find the way out I’ll want to be the one using the silk toilet paper. This book confirms a few of the suspicions I had already about the Finance world.

I highly suggest this book and give it five stars, why because it is a new ideas and it has kept me thinking about our finical system. IF you invest you money in the market, invest your time in this book.

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  • Jamie
  • 22-05-18

Audio by author/ lots of great info/ ez understand

You've probably thought there's something fishy going on with stocks & their prices and you'd be right. Read this before buying any stock educate yourself 1st (also this book is not a bunch of conspiracy theories, instead it's just honest info people do know about where stock prices comes from)

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  • Beto
  • 13-12-19

Great Book!!

If anyone who is a Finance major and is spectacle of the markets or if your not in the finance world this book ensure your gut feelings. Very well written

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  • Mark D. Henson
  • 08-11-19

Refreshing Perspective

Great, simple book, yet eye opening even for market veterans. Ponzi schemes only happen to 'the other guy' but perhaps that could be you someday. Read this book and change your programming.

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  • Samuel Rochette
  • 25-09-19

Simple yet effective

Tan Liu brings forth a truth so obvious that many may feel dumb not realizing it sooner or by themselves. He does so with an elegant simplicity and efficiency. It is a great book for those that are not well versed in finances or even economics, yet it probably will not feel too simple for people with an academic background. Arguments are discussed in a logical, yet philosophical way.

Although most of the book is centered on destroying counter-arguments, it feels only natural. After all, the truth highlighted is a simple fact: a huge part of today's finances is a scam, the same as a Ponzi scheme.

Liu's main idea should be discussed way more than it currently is. Therefore, I highly recommend this book to everyone, as we all have a civic responsibility toward our society, especially when a lot of money is potentially wasted. Even if you do not agree with him (or his idea), the arguments provided are by themselves worth considering. The question is often more important than the answer.

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  • Jeff
  • 17-04-19

Points Out the Obvious - So Obvious We Miss It

This is a great book, where the basic premises are presented in a very direct and logical fashion. The whole idea is a great big "Duh. That is obvious." However, the obviousness of it all shows why MOST people miss it – the flaw is too big, almost the whole picture, not just a small easily fixed part. It is simple (not simplistic) and people, especially the financial “experts” who have been shown to be in error tens of thousands of times, cannot handle simple. They are addicted to complexity as it helps them hide behind the, “it is too complex for you to understand” idea.

The very FOUNDATION, actually the ground beneath the foundation, of our stock and trading system is essentially a false premise and the flaw is SO BIG that it is very hard to admit especially when we base SOOOOO much on it. We have to admit that we live in a myth that we all are a part of.

Highly recommend that everyone listen to the intro on YouTube. Not only is it well written, but the narration is truly excellent.

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  • Andrew
  • 22-12-18

Insightful attempt to be thorough

I initially enjoyed the book. The premise is interesting and thought-provoking. While not always successful the author does his best to remove his emotions and natural biases from the narrative.
The book does go on a little long by trying to prove the author’s point from various angles, which becomes repetitive. By the end he suggest alternatives to the traditional labels describing the value of stock positions.

I was ready to put this book down about halfway through because it became so repetitive. The author’s main point, that stocks have value only because a market of willing buyers and sellers , and not backed by the actual companies themselves, are willing to trade with each other, has been made over and over. Enough already!