Don't agree with that at all that is what the article says. (It doesn't match up with my definition either based on my years of business experience either.)
Definition of "speculation" from investopedia:
"The act of trading in an asset, or conducting a financial transaction, that has a significant risk of losing most or all of the initial outlay, in expectation of a substantial gain."
Based on history there is no reason to believe that the purchase of a taxi medallion could result reasonably in losing "most or all" of the initial outlay. (Unless of course you decided to buy one while ignoring the current events going on of course).
Of course you can make any investment or purchase speculative depending on how much of a chance you want to take.
If you decide to get in on an up and coming area in real estate (a run down area that you hope will change over the course of many years) that could easily be seen as speculation. Otoh, buying a condo in a well established neighborhood that has a history would not be seen as speculation which is not the same as saying that you bought because you felt that the value could double and if that doesn't happen you may feel you have "lost" something (the high gain you expected).
Even in the case of eminent domain taking of property for public good the property owners are compensated somewhat fairly for the loss of value of their property. The government doesn't come along and say "hey we need this area for a road sorry guys to bad it happened to you".
I would go further to say that these medallion owners would band together and at least attempt to do whatever they could legally to find a way to prevent something like this from happening if they could. Why? There is enough money involved to pay lawyers to muck up the process or delay it (just like with eminent domain, people even if there is compensation, will do that.)
The comparison with eminent domain is interesting. If the government abolished taxi medallions, are they really taking something from those who own them? The medallion is basically the right to operate a taxi. If the government abolished medallions, then they'd still have the right to operate a taxi, it's just that a lot of other people would too. Obviously they lose a major competitive edge, but strictly speaking, the government hasn't taken any property here.
The best comparison I can think of involving real property would be owning a private tract of land in a valuable area that's almost all owned and unused by the government. One day, the government decides to sell its land. The value of your land plummets. It's still valuable due to whatever intrinsic wealth it has, but the new glut of supply makes it much less valuable. Is the government obligated to compensate you for that loss of value when they sell their land? I'd think not.
> "The act of trading in an asset, or conducting a financial transaction, that has a significant risk of losing most or all of the initial outlay, in expectation of a substantial gain."
Based on recent history no. But maybe based on longer history? Imagine a pandemic that wipes our a large # of population, now taxi medallions for whatever reason are not that important so they drop in value.
Medallion system is sustain by the laws. Laws can change. The bet is that the laws own't change drastically but that is just a "speculation".
Government is nice enough to offer a compensation in eminent domain, but they don't have to. What if they don't? What would you do? Sue them? You can't. Gather a militia and march towards the White House or the Senate building?
If you had asked someone 20-30 years or so ago. "Do you imagine government one day will be able to store and read all your communications, telephone, mail?" Most people would have bet it would never happen because of Free Speech and it was just something we made fun of other corrupt and evil countries of doing. Yet here we are today. If you'd somehow made a financial bet against it, it would be a losing bet.
> Based on history there is no reason to believe that the purchase of a taxi medallion could result reasonably in losing "most or all" of the initial outlay.
This is always the case before an asset loses value for the first time.
Outright seizure gets headlines, but the government can harm your property through regulatory takings as well. So crazy zoning can make your property value decline, and it's not well-established practice to compensate you for your loss. See Richard Epstein's work on this.
The Supreme Court will decide this year on a potentially really important case, Koontz v. St. Johns River Water Management District. A landowner wanted to develop some property, but the local water protection agency denied the permit because he wouldn't pay for mitigation that was totally offsite. This stuff can be borderline extortion.
Don't agree with that at all that is what the article says. (It doesn't match up with my definition either based on my years of business experience either.)
Definition of "speculation" from investopedia:
"The act of trading in an asset, or conducting a financial transaction, that has a significant risk of losing most or all of the initial outlay, in expectation of a substantial gain."
Based on history there is no reason to believe that the purchase of a taxi medallion could result reasonably in losing "most or all" of the initial outlay. (Unless of course you decided to buy one while ignoring the current events going on of course).
http://www.investopedia.com/terms/s/speculation.asp
Of course you can make any investment or purchase speculative depending on how much of a chance you want to take.
If you decide to get in on an up and coming area in real estate (a run down area that you hope will change over the course of many years) that could easily be seen as speculation. Otoh, buying a condo in a well established neighborhood that has a history would not be seen as speculation which is not the same as saying that you bought because you felt that the value could double and if that doesn't happen you may feel you have "lost" something (the high gain you expected).
Even in the case of eminent domain taking of property for public good the property owners are compensated somewhat fairly for the loss of value of their property. The government doesn't come along and say "hey we need this area for a road sorry guys to bad it happened to you".
I would go further to say that these medallion owners would band together and at least attempt to do whatever they could legally to find a way to prevent something like this from happening if they could. Why? There is enough money involved to pay lawyers to muck up the process or delay it (just like with eminent domain, people even if there is compensation, will do that.)