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

[xeroc]

If I understand you correctly: it can still work with MPA, the feed price would just be higher to incorporate value of dividends with value of stock together. In a sense your decreasing the upside of shorters ( effectively removing supply in the supply demand equation).

That's correct, as long as a unit of the MPA reflects a higher quantity of the underlying asset (reflecting a reinvested dividend), so that the price per notional share remains consistent with the underlying asset. See my previous comments.

THIS ^^

Still a feature to be able to easily "airdrop" may be a good idea .. not only to reward those holding onto their brownie.pts

[starspirit]

If I understand you correctly: it can still work with MPA, the feed price would just be higher to incorporate value of dividends with value of stock together. In a sense your decreasing the upside of shorters ( effectively removing supply in the supply demand equation).

That's correct, as long as a unit of the MPA reflects a higher quantity of the underlying asset (reflecting a reinvested dividend), so that the price per notional share remains consistent with the underlying asset. See my previous comments.

[Bitcoinfan]

If I understand you correctly: it can still work with MPA, the feed price would just be higher to incorporate value of dividends with value of stock together. In a sense your decreasing the upside of shorters ( effectively removing supply in the supply demand equation).

[MrJeans]

Buying back stock is Warren Buffett's preferred way of returning cash to shareholders (rather than paying a dividend).

I agree with Buffett.

Its also way easier to implement on a blockchain, by burning an asset, instead of trying to distribute small amounts of an asset among all holders.

This could work for UIAs, but not for MPA where the price is not influenced by supply and demand, right?

[Ander]

Buying back stock is Warren Buffett's preferred way of returning cash to shareholders (rather than paying a dividend).

I agree with Buffett.

Its also way easier to implement on a blockchain, by burning an asset, instead of trying to distribute small amounts of an asset among all holders.

[Bitcoinfan]

In the real market-- since shorts are borrowing the stocks (and therefore pay interest on that) they also have to pay any dividends that are received back to the stock owner.  If you are making a statement that no one will short because it is a bad deal, then you will have to explain why there are so many shorters in the real marketplace, despite the disadvantage you perceive?

This is not really an apples to apples comparison. 

I'm not going to get into the monetary policies that promote borrowing vast sums of money to gamble on the market.

shorting is much more important to a bitasset than it is to a stock.  Since all bitassets require someone to be short to even exist.  Shorts and longs must be balanced.

I am sure some people will short specific bitstocks even if they are required to pay dividends.  I don't think many will, and this will lead to a very shallow market.

Balancing the incentives between shorts and longs is very important.  I think we would be better off with a simple model that doesn't attempt to price in dividends.  I could very well be wrong.

I do think that adjusting the amount of stock a market pegged asset represents is an elegant solution that if done properly could be really neat.

Your objection is more against bitshares 2.0 in general since collateralization of shorts and longs aare required. So your actually pointing out a weakness is bitshares.  That it will never be as large as the market its replicating because it needs two sides to match.  That's true, but is irrelevant to dividend payouts included above the spot stock price. 

 Adding dividend to the stock price makes no difference since dividend policy are consistent and don't change often from day to day or month to month. At most a company may change their dividend rate quarterly, but that's a very active company and its not a big deal.  So if dividend policy is consistent enough for a shorter to make a bet, why would adding it on top the spot deterr shooters?  It shouldn't.  They should still short and make a bet when they believe a stock is going down.  They face the same category of costs ( when you do the math out) as a shorter would on Wall Street.   

.

If adding the dividend makes no difference in the likelihood of a potential shorter going short, I can only assume that it would make no difference to the likelihood of a party going long.  Why add so much complexity to the system then?

Just saw this and wanted to share about Warren Buffet's explanation, which is simpler than mine.  BI cites the two famous nobel winners that I mentioned before in the dividend discount model.  Hopefully this explains it for people are learning financial engineering on the fly.  Buying back stock is Warren Buffett's preferred way of returning cash to shareholders (rather than paying a dividend).


Furthermore, introducing a dividend may turn off investors who don't want dividends.  "Above all, dividend policy should always be clear, consistent and rational," writes Buffett.  "A capricious policy will confuse owners and drive away would-be investors."

"For those who want a dividend, Buffett lays out a scenario where a shareholder can effectively generate dividend-type wealth buy selling shares. (This is an idea that was introduced by Franco Modigliani and Merton Miller.)"

http://www.businessinsider.com/warren-buffett-on-dividends-2013-3

[eagleeye]

This may help with the U.S. Treasury market http://www.bloomberg.com/quote/USGG2YR:IND 2 year U.S. treasury I believe this is the yield.

[cylonmaker2053]

Why add so much complexity to the system then?

at least in the near term, it's most important to get the bitUSD/bitCNY and 30-day, 90-day, and 1-year bond markets functioning and somewhat efficient. if we can't nail that, then there's absolutely no need for synthetic individual corporate stocks.

I couldn't agree more.  I have enjoyed reading the ideas in this thread.  I wasn't trying to be a wet napkin on the discussion.  I just don't think its ready to be implemented.  Perhaps it would be better to say that bitshares isn't ready for it.

true, it's not and we're kind of in limbo until 2.0 is successfully released. for now we can continue drumming up some volume for bitassets, tinker with them on the margins, but the real business will start with the 2.0 bond market.

[MrJeans]

Agreed, lets not avoid thoughts and concepts just because they may seam complicated.

If someone doesnt like the idea of taking about further features they can treat the conversation as an intellectual debate (which is what this thread is).

If we always decided to not make things complicated we should have just made a POW bitcoin clone and not a decentralized exchange.

[fuzzy]

Though I agree with puppies we need to get ready for it regardless.

[puppies]

Why add so much complexity to the system then?

at least in the near term, it's most important to get the bitUSD/bitCNY and 30-day, 90-day, and 1-year bond markets functioning and somewhat efficient. if we can't nail that, then there's absolutely no need for synthetic individual corporate stocks.

I couldn't agree more.  I have enjoyed reading the ideas in this thread.  I wasn't trying to be a wet napkin on the discussion.  I just don't think its ready to be implemented.  Perhaps it would be better to say that bitshares isn't ready for it.

[cylonmaker2053]

Why add so much complexity to the system then?

at least in the near term, it's most important to get the bitUSD/bitCNY and 30-day, 90-day, and 1-year bond markets functioning and somewhat efficient. if we can't nail that, then there's absolutely no need for synthetic individual corporate stocks.

[puppies]

In the real market-- since shorts are borrowing the stocks (and therefore pay interest on that) they also have to pay any dividends that are received back to the stock owner.  If you are making a statement that no one will short because it is a bad deal, then you will have to explain why there are so many shorters in the real marketplace, despite the disadvantage you perceive?

This is not really an apples to apples comparison. 

I'm not going to get into the monetary policies that promote borrowing vast sums of money to gamble on the market.

shorting is much more important to a bitasset than it is to a stock.  Since all bitassets require someone to be short to even exist.  Shorts and longs must be balanced.

I am sure some people will short specific bitstocks even if they are required to pay dividends.  I don't think many will, and this will lead to a very shallow market.

Balancing the incentives between shorts and longs is very important.  I think we would be better off with a simple model that doesn't attempt to price in dividends.  I could very well be wrong.

I do think that adjusting the amount of stock a market pegged asset represents is an elegant solution that if done properly could be really neat.

Your objection is more against bitshares 2.0 in general since collateralization of shorts and longs aare required. So your actually pointing out a weakness is bitshares.  That it will never be as large as the market its replicating because it needs two sides to match.  That's true, but is irrelevant to dividend payouts included above the spot stock price. 

 Adding dividend to the stock price makes no difference since dividend policy are consistent and don't change often from day to day or month to month. At most a company may change their dividend rate quarterly, but that's a very active company and its not a big deal.  So if dividend policy is consistent enough for a shorter to make a bet, why would adding it on top the spot deterr shooters?  It shouldn't.  They should still short and make a bet when they believe a stock is going down.  They face the same category of costs ( when you do the math out) as a shorter would on Wall Street.   

.

If adding the dividend makes no difference in the likelihood of a potential shorter going short, I can only assume that it would make no difference to the likelihood of a party going long.  Why add so much complexity to the system then?

[Bitcoinfan]

In the real market-- since shorts are borrowing the stocks (and therefore pay interest on that) they also have to pay any dividends that are received back to the stock owner.  If you are making a statement that no one will short because it is a bad deal, then you will have to explain why there are so many shorters in the real marketplace, despite the disadvantage you perceive?

This is not really an apples to apples comparison. 

I'm not going to get into the monetary policies that promote borrowing vast sums of money to gamble on the market.

shorting is much more important to a bitasset than it is to a stock.  Since all bitassets require someone to be short to even exist.  Shorts and longs must be balanced.

I am sure some people will short specific bitstocks even if they are required to pay dividends.  I don't think many will, and this will lead to a very shallow market.

Balancing the incentives between shorts and longs is very important.  I think we would be better off with a simple model that doesn't attempt to price in dividends.  I could very well be wrong.

I do think that adjusting the amount of stock a market pegged asset represents is an elegant solution that if done properly could be really neat.

Your objection is more against bitshares 2.0 in general since collateralization of shorts and longs aare required. So your actually pointing out a weakness is bitshares.  That it will never be as large as the market its replicating because it needs two sides to match.  That's true, but is irrelevant to dividend payouts included above the spot stock price. 

 Adding dividend to the stock price makes no difference since dividend policy are consistent and don't change often from day to day or month to month. At most a company may change their dividend rate quarterly, but that's a very active company and its not a big deal.  So if dividend policy is consistent enough for a shorter to make a bet, why would adding it on top the spot deterr shooters?  It shouldn't.  They should still short and make a bet when they believe a stock is going down.  They face the same category of costs ( when you do the math out) as a shorter would on Wall Street.   

. 

[puppies]

In the real market-- since shorts are borrowing the stocks (and therefore pay interest on that) they also have to pay any dividends that are received back to the stock owner.  If you are making a statement that no one will short because it is a bad deal, then you will have to explain why there are so many shorters in the real marketplace, despite the disadvantage you perceive?

This is not really an apples to apples comparison. 

I'm not going to get into the monetary policies that promote borrowing vast sums of money to gamble on the market.

shorting is much more important to a bitasset than it is to a stock.  Since all bitassets require someone to be short to even exist.  Shorts and longs must be balanced.

I am sure some people will short specific bitstocks even if they are required to pay dividends.  I don't think many will, and this will lead to a very shallow market.

Balancing the incentives between shorts and longs is very important.  I think we would be better off with a simple model that doesn't attempt to price in dividends.  I could very well be wrong.

I do think that adjusting the amount of stock a market pegged asset represents is an elegant solution that if done properly could be really neat.