Are we going to be the first, bitAPPLE (article)

[MrJeans]

To me this discussion is groundless since there is a generally misunderstanding of how markets work.  There is no need at all to pay out dividends, since based on years of academic research, the stock price should already reflect that in its value.  Why else do you think a company has a stock price?  Because we're betting on the amount another seller will sell it for (eg. orginal bitshares molymorphic digital asset).  No.  its because shareholders have a stake of the profits from dividends.  Therefore the price reflects dividends.  This is the onereason why molymorphic digital assets did not work-- since there was no stake in profits, no causal relationship to the companies financial performance, the system was pegging based on inferences of what other people would buy or sell based on the agreement of name and what the asset possibly represents. 

The dividend discount model (DDM) is a method of valuing a company's stock price based on the theory that its stock is worth the sum of all of its future dividend payments, discounted back to their present value.[1] In other words, it is used to value stocks based on the net present value of the future dividends. The equation most widely used is called the Gordon growth model. It is named after Myron J. Gordon of the University of Toronto, who originally published it along with Eli Shapiro in 1956 and made reference to it in 1959.[2][3] Their work borrowed heavily from the theoretical and mathematical ideas found in John Burr Williams 1938 book "The Theory of Investment Value."

https://en.wikipedia.org/wiki/Dividend_discount_model

Ya we know this.
But if you discounting future dividends you need to get those dividends.
If you dont get those dividends you cant discount it.
Its like saying you should value a goose that represents a gold-egg-laying-goose at the same value given to a gold-egg-laying-goose even if your goose doesnt lay any golden eggs.
I would personally pay more for a goose that lays golden eggs than for one that does not.

So MPA should trade at a discount to actual stock price.
MPA value = real world stock price - discounted future dividends

The issue is that when you use the perpetuity model for stock valuation you end up with a zero value for dividend paying stocks if you remove the dividends.
But then again, models are always a bit funny.

[Bitcoinfan]

To me this discussion is groundless since there is a generally misunderstanding of how markets work.  There is no need at all to pay out dividends, since based on years of academic research, the stock price should already reflect that in its value.  Why else do you think a company has a stock price?  Because we're betting on the amount another seller will sell it for (eg. orginal bitshares molymorphic digital asset).  No.  its because shareholders have a stake of the profits from dividends.  Therefore the price reflects dividends.  This is the onereason why molymorphic digital assets did not work-- since there was no stake in profits, no causal relationship to the companies financial performance, the system was pegging based on inferences of what other people would buy or sell based on the agreement of name and what the asset possibly represents. 

The dividend discount model (DDM) is a method of valuing a company's stock price based on the theory that its stock is worth the sum of all of its future dividend payments, discounted back to their present value.[1] In other words, it is used to value stocks based on the net present value of the future dividends. The equation most widely used is called the Gordon growth model. It is named after Myron J. Gordon of the University of Toronto, who originally published it along with Eli Shapiro in 1956 and made reference to it in 1959.[2][3] Their work borrowed heavily from the theoretical and mathematical ideas found in John Burr Williams 1938 book "The Theory of Investment Value."

https://en.wikipedia.org/wiki/Dividend_discount_model

[cylonmaker2053]

As long as you are happy for bitAPPLE to represent a number of Apple shares that grows over time, you can always define the exposure as as accumulation index that assumes any dividends are reinvested. Price feeds would need to adjust accordingly. This would mean no dividends are required to be distributed.

that's also a good approach

Would make for complicated analysis for uploading feeds and investors would never be able to compare traditional price to Bitshares price.

How about the dividends is distributed by the network creating new tokens of that MPA equal to the amount of dividends needed in proportion to the market cap of the MPA. The new tokens would then be distributed proportionally.

This means everyone gets some dividends which they can trade for bitUSD. Share price stays same as traditional price.

Problem is the dividend tokens are not-collateralize   

Also, still want to know if it is possible to share drop some bitUSD (as dividends) on everyone who owns a certain UIA. Anyone know?

this is a good discussion, but we may be overcomplicating things. a bitAPPL could simply use the stock price feed and that's that...no fancy add-ons to mimic share ownership. we're creating pegged assets, not actual share ownership in corporate equity, so i don't see a need to go beyond simply pulling in the stock price feed and calling it a day.

I agree with what you say here. Personally I can't see a way of representing the dividends of normal stocks using MPA. Dividends are part of the profit from that company, and since we're only trying to peg an asset to its real market value, how could it be possible to distribute dividends? Where would that added value come from? And adding the cumulative value of the dividends to the stock price would only increase the difference between the feed and the MPA value, which will make it very difficult to evaluate in the future.

Unless someone comes up with a very clever way to create and distribute dividends using MPA, I don't see this as easily feasible.

yes, exactly...no need to complicate things, or to take actions that'd diverge the price of the pegged asset to the underlying.

[Chuckone]

As long as you are happy for bitAPPLE to represent a number of Apple shares that grows over time, you can always define the exposure as as accumulation index that assumes any dividends are reinvested. Price feeds would need to adjust accordingly. This would mean no dividends are required to be distributed.

that's also a good approach

Would make for complicated analysis for uploading feeds and investors would never be able to compare traditional price to Bitshares price.

How about the dividends is distributed by the network creating new tokens of that MPA equal to the amount of dividends needed in proportion to the market cap of the MPA. The new tokens would then be distributed proportionally.

This means everyone gets some dividends which they can trade for bitUSD. Share price stays same as traditional price.

Problem is the dividend tokens are not-collateralize   

Also, still want to know if it is possible to share drop some bitUSD (as dividends) on everyone who owns a certain UIA. Anyone know?

this is a good discussion, but we may be overcomplicating things. a bitAPPL could simply use the stock price feed and that's that...no fancy add-ons to mimic share ownership. we're creating pegged assets, but actual share ownership in corporate equity, so i don't see a need to go beyond simply pulling in the stock price feed and calling it a day.

I agree with what you say here. Personally I can't see a way of representing the dividends of normal stocks using MPA. Dividends are part of the profit from that company, and since we're only trying to peg an asset to its real market value, how could it be possible to distribute dividends? Where would that added value come from? And adding the cumulative value of the dividends to the stock price would only increase the difference between the feed and the MPA value, which will make it very difficult to evaluate in the future.

Unless someone comes up with a very clever way to create and distribute dividends using MPA, I don't see this as easily feasible. 

[cylonmaker2053]

As long as you are happy for bitAPPLE to represent a number of Apple shares that grows over time, you can always define the exposure as as accumulation index that assumes any dividends are reinvested. Price feeds would need to adjust accordingly. This would mean no dividends are required to be distributed.

that's also a good approach

Would make for complicated analysis for uploading feeds and investors would never be able to compare traditional price to Bitshares price.

How about the dividends is distributed by the network creating new tokens of that MPA equal to the amount of dividends needed in proportion to the market cap of the MPA. The new tokens would then be distributed proportionally.

This means everyone gets some dividends which they can trade for bitUSD. Share price stays same as traditional price.

Problem is the dividend tokens are not-collateralize   

Also, still want to know if it is possible to share drop some bitUSD (as dividends) on everyone who owns a certain UIA. Anyone know?

this is a good discussion, but we may be overcomplicating things. a bitAPPL could simply use the stock price feed and that's that...no fancy add-ons to mimic share ownership. we're creating pegged assets, not actual share ownership in corporate equity, so i don't see a need to go beyond simply pulling in the stock price feed and calling it a day.

[MrJeans]

As long as you are happy for bitAPPLE to represent a number of Apple shares that grows over time, you can always define the exposure as as accumulation index that assumes any dividends are reinvested. Price feeds would need to adjust accordingly. This would mean no dividends are required to be distributed.

that's also a good approach

Would make for complicated analysis for uploading feeds and investors would never be able to compare traditional price to Bitshares price.

How about the dividends is distributed by the network creating new tokens of that MPA equal to the amount of dividends needed in proportion to the market cap of the MPA. The new tokens would then be distributed proportionally.

This means everyone gets some dividends which they can trade for bitUSD. Share price stays same as traditional price.

Problem is the dividend tokens are not-collateralize   

Also, still want to know if it is possible to share drop some bitUSD (as dividends) on everyone who owns a certain UIA. Anyone know?

[fer87]

I think like you eagleeye   

[puppies]

Where would the revenue stream for dividends even come from?  An attempt to match dividends paid out by the real asset would open you up to potential losses.  I would focus instead on the benefits of the bitasset, such as no counterparty risk, almost instant transactions, and the ability to trade during off hours.  As an investor I would feel less confident if I thought that unsustainable promises had been made.

yeah divs could be reflected in price--if not paid out in bitassets then these instruments would be discounted accordingly--or there could be a cost built into the short mechanism akin to interest use today.

Well Apple makes its revenues from selling shiny things.  bitApple would have to make its revenue from fees.  Dividends could be paid from these fees, but at the cost of either increasing fees on users or decreasing profits for the administrator of the asset.  I don't think that attempting to match Apples dividends on a per share basis would be a good idea.  If there are to be dividends paid out they should be based upon the profitability of bitApple.  There is also no reason to limit these dividends to the same structure as the actual company.  The administrator of bitApple could pay out dividends on a weekly or monthly basis.  Depending upon fee structure and usage these dividends could even be greater than that paid out on actual Apple stock.

I'm thinking about bitAPPLE as a market pegged asset not a UIA

I am not 100% on the structure of MPA's in 2.0, and thats why I was talking about the administrator of the asset.  It really doesn't matter if that is an individual or the network as a whole though.  Unless you're suggesting dilution to pay for the dividends (which I would strongly oppose), the funds to pay the dividends would need to come from fees of some sort.  Paying dividends would necessitate reducing the profit of the network, increasing fees, or a combination of both.  I think paying dividends could be a very effective way of getting people to hold bitassets.  I hope to see lots of experiments to find the optimum level of profit for the network, and incentive to hold.  I don't think the network should take on the responsibility of matching the dividends paid out by a centralized company.  BTS holders should not be forced to pay bitAPPLE holders. 

[eagleeye]

Where would the revenue stream for dividends even come from?  An attempt to match dividends paid out by the real asset would open you up to potential losses.  I would focus instead on the benefits of the bitasset, such as no counterparty risk, almost instant transactions, and the ability to trade during off hours.  As an investor I would feel less confident if I thought that unsustainable promises had been made.

yeah divs could be reflected in price--if not paid out in bitassets then these instruments would be discounted accordingly--or there could be a cost built into the short mechanism akin to interest use today.

Well Apple makes its revenues from selling shiny things.  bitApple would have to make its revenue from fees.  Dividends could be paid from these fees, but at the cost of either increasing fees on users or decreasing profits for the administrator of the asset.  I don't think that attempting to match Apples dividends on a per share basis would be a good idea.  If there are to be dividends paid out they should be based upon the profitability of bitApple.  There is also no reason to limit these dividends to the same structure as the actual company.  The administrator of bitApple could pay out dividends on a weekly or monthly basis.  Depending upon fee structure and usage these dividends could even be greater than that paid out on actual Apple stock.

I'm thinking about bitAPPLE as a market pegged asset not a UIA

[puppies]

Where would the revenue stream for dividends even come from?  An attempt to match dividends paid out by the real asset would open you up to potential losses.  I would focus instead on the benefits of the bitasset, such as no counterparty risk, almost instant transactions, and the ability to trade during off hours.  As an investor I would feel less confident if I thought that unsustainable promises had been made.

yeah divs could be reflected in price--if not paid out in bitassets then these instruments would be discounted accordingly--or there could be a cost built into the short mechanism akin to interest use today.

Well Apple makes its revenues from selling shiny things.  bitApple would have to make its revenue from fees.  Dividends could be paid from these fees, but at the cost of either increasing fees on users or decreasing profits for the administrator of the asset.  I don't think that attempting to match Apples dividends on a per share basis would be a good idea.  If there are to be dividends paid out they should be based upon the profitability of bitApple.  There is also no reason to limit these dividends to the same structure as the actual company.  The administrator of bitApple could pay out dividends on a weekly or monthly basis.  Depending upon fee structure and usage these dividends could even be greater than that paid out on actual Apple stock.

[cylonmaker2053]

Where would the revenue stream for dividends even come from?  An attempt to match dividends paid out by the real asset would open you up to potential losses.  I would focus instead on the benefits of the bitasset, such as no counterparty risk, almost instant transactions, and the ability to trade during off hours.  As an investor I would feel less confident if I thought that unsustainable promises had been made.

yeah divs could be reflected in price--if not paid out in bitassets then these instruments would be discounted accordingly--or there could be a cost built into the short mechanism akin to interest use today.

[topcandle]

Where would the revenue stream for dividends even come from?  An attempt to match dividends paid out by the real asset would open you up to potential losses.  I would focus instead on the benefits of the bitasset, such as no counterparty risk, almost instant transactions, and the ability to trade during off hours.  As an investor I would feel less confident if I thought that unsustainable promises had been made.
[/quote

It should be reflected in price.  Meaning even though not paid out, the price has gone up on the market to account for this premium

[puppies]

Where would the revenue stream for dividends even come from?  An attempt to match dividends paid out by the real asset would open you up to potential losses.  I would focus instead on the benefits of the bitasset, such as no counterparty risk, almost instant transactions, and the ability to trade during off hours.  As an investor I would feel less confident if I thought that unsustainable promises had been made.

[fuzzy]

Step 1 add the indicies for the DOW/NASDAQ/etc. components
Step 2 add the individual high volume components (APPL, GOOG, FB,AMZN,etc)
Step 3 add lower liquidity components as markets demand

As always eagle. Good call.

[cylonmaker2053]

As long as you are happy for bitAPPLE to represent a number of Apple shares that grows over time, you can always define the exposure as as accumulation index that assumes any dividends are reinvested. Price feeds would need to adjust accordingly. This would mean no dividends are required to be distributed.

that's also a good approach