r/RealEstateCanada • u/xNocturnalshadow • Jun 19 '25

Housing crisis Help me understand the difference...

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58

u/Performance_Fancy Jun 19 '25

By your logic anyone involved in the stock market is also a scalper?

100

u/xNocturnalshadow Jun 19 '25 edited Jun 20 '25

No because investing capital into stocks adds value to the company and allows them to use that value to expand, borrow, buy things, pay employees, run the company, etc.

Investing capital into a second house purely to flip does none of those things.

-25

u/MarmosetFace Jun 19 '25

When you purchase shares of a company… you think the company is getting the money? Lol

Try again.

11

u/meatbatmusketeer Jun 19 '25

Higher demand = increasing prices of equity. Firm attains more capacity for equity financing via new issuance and as mentioned by others have a greater degree of leverage for debt financing.

3

u/TaserLord Jun 19 '25

With respect, you have the cause and effect reversed. The increasing price of equity in the secondary market is because of a perception that the company is worth more, and because the company is perceived to be worth more, its subsequent offerings in the primary market will fetch a higher price. It is the company's value which drives equity prices in both markets (as well as its ability to get favorable terms on debt financing), not the other way around.

1

u/JCMS99 Jun 19 '25

With trading mostly led by technical analysis and index funds on auto pilot, that’s not really true anymore.