Re:It can all go to zero
by prostoalex on Thursday January 18, 2018 @03:24PM
(#16181014)
It’s not about holding, it’s about backstop.
A company’s stock (or bond) is a right to get some compensation in case of dissolution, bankruptcy, or liquidation sale. A precious metal like gold still has a backstop value - it can be sold to electronics manufacturers to make those beautiful gold-plated audio cables. Diamonds have a backstop value of being used in boring and drilling. Vacated real estate can be converted to other uses.
All of those assets (when owned outright and not pledged) are unlikely to go to $0.
A company’s stock (or bond) is a right to get some compensation in case of dissolution, bankruptcy, or liquidation sale. A precious metal like gold still has a backstop value - it can be sold to electronics manufacturers to make those beautiful gold-plated audio cables. Diamonds have a backstop value of being used in boring and drilling. Vacated real estate can be converted to other uses.
All of those assets (when owned outright and not pledged) are unlikely to go to $0.