vroman: Two words - rollover jackpots.

What if we phrase a Pascal's Wager-like problem like this:

If every winner of a certain lottery receives $300 million, a ticket costs $1, the chances of winning are 1 in 250 million, and you can only buy one ticket, would you buy that ticket?

There's a positive expected value in dollars, but 1 in 250 million is basically not gonna happen (to you, at least).

It can be defined by the net present value of the future dividends of the stock. Alternately, it can be determined by the per-share liquidation value of the company's assets (after creditors are paid).

So if the stock does not pay dividends, and never will, and the corporation's assets equal its liabilities, and always will, then the appropriate value of the stock is, in fact, zero? (Well, there are voting rights, but still...)

Doug: Sony loses money on every PS3, so it would be bad news if people bought them for FF and bought few other games; I don't know how plausible that is.

Yeah, that would probably be bad, too; a PS3 sold that doesn't generate much additional revenue is just a straight loss. On the other hand, once you've already decided to get the system because of the blockbuster title that you Need To Have, non-blockbuster games for the system become more attractive than they were before, so the pattern of "very few games" over the entire lifetime of the system isn't really all that likely. In the short run, though, it could definitely be an issue. Personally, I currently have only two PS3 games: Disgaea 3, and Metal Gear Solid 4. I expect to get more eventually, but not for a while.

Once upon a time, I thought I saw some important news that should have affected a company's stock price, as it would have led to significantly decreased demand for one of the company's flagship products.

I looked at the stock price, and after the trade show in which the announcement was made, the value of the stock had, to my great surprise, actually increased.

That company was Sony. The announcement was that Final Fantasy XIII would no longer be a Playstation 3 exclusive; its English version would also be released for the Xbox 360. As a game player, I knew that Final Fantasy was a game series that was popular enough to drive sales of whatever console it was available for, regardless of its other merits. However, this announcement meant that many people who might have bought a Playstation 3 would no longer do so. As the original Playstation and the Playstation 2 were one of Sony's largest revenue sources, further bad news regarding the the Playstation 3's future should have negatively affected its stock price. Why didn't it?

I came up with three guesses:

1) Average stock traders don't know as much as I do about the video game market. This is possible, but "Hey, Sony just lost its exclusive Killer App!" should be something that anyone actually paying attention should notice - stock traders aren't that stupid, are they? 2) Sony is a huge conglomerate. It sells so many other products that bad news in one area either just didn't matter (nobody expected the Playstation 3 to sell as many units as its earlier versions, for the simple reason that it was much more expensive) or it was outweighed by good news about other markets, such as digital cameras. 3) There is some other explanation, which I have not yet thought of.

But clearly that person does not likewise think that the price of OB is going to go way up, because if she did, why would she sell it to you now, at the current price?

Maybe she needs to increase liquidity for some reason? For example, the IRS wants payment in cash, not stock. Additionally, she might want to use the resources for immediate consumption rather than for investments; she might want to use the cash to take a vacation, or pay medical bills. There are all sorts of reasons why someone might want to sell a stock, even if they think it will go up.

(Myself, I sort of suspect that, if a stock doesn't pay dividends, it's mostly worthless. To quote some guy with a blog:

If you put your Mickey Mantle rookie card on your desk, and a share of your favorite non-dividend paying stock next to it, and let it sit there for 20 years. After 20 years you would still just have two pieces of paper sitting on your desk.)

I've heard (secondhand) stories about people being inspired to enter technical fields because of the television program Square One.

What if, realistically, your plan turns out to be "Do nothing of consequence, and let my successor deal with the mess?" You probably don't want to actually tell people that, even if that's the way the incentives turn out. (For example, my father works for a company that recently fired its CEO, after some decisions he made turned out to be disastrous. Unfortunately, according to the CEO's contract, they had to give him a huge severance package if they fired him. Ergo: the company is screwed, but he isn't.)

I wonder... are the works of Karl Marx idealistic, cynical, or both?

Regarding Judiasm: my father had a similar experience as a child. He assumed that the Hebrew passages he was given must have been great and profound because, well, they came from God. When he finally did read a translation, he was annoyed because they were the kind of stupid banalities that any idiot could have thought up. (My father is an atheist.)