The stock market is not economic security or mobility, housing security, quality of life or education, standard of living … or everything else that actually matters to 99% of the human population.
The stock market isn’t even “the economy”. It’s literally just an indicator of how much more wealthy the wealthiest have grown over a period of time.
The stock market is just a way for people with more money to slowly take money away from people with less money, while the people with less money feel like they have a chance of winning. For poor people it is basically gambling, and for rich people it is basically owning the casino.
There are so many built-in structures to the way it operates to favour the flow of money to larger holders over time.
Also it’s only slow for the rich people, for the poor people it can happen in an instant.
The stock market is just a way for people with more money to slowly take money away from people with less money
A stock price isn’t “money”. It is, literally, a price tag. The price of a stock going up does not take actual money out of anyone’s wallet.
If my $5 baseball card becomes worth $100 as time passes while I continue to possess it, do you seriously believe I’ve now done the equivalent of stealing $95?
Your baseball card became worth more because more of them got lost or destroyed over time so it got more rare. So the increase in value came from all the people that lost their 5 dollar card. And also partially from inflation.
Completely different from the stock market.
The money from the stock market comes primarily from other investors. You may not be directly taking it from them, but there are only a few layers of abstraction between them putting money into a stock that went down and you taking money out of a stock that went up.
But the main advantage rich people have in the stock market is less latency in their trades and more weight to swing around. Not to mention being much more likely to have insider info, but even without actually cheating they have quite a few advantages that tip it in their favour.
Your baseball card became worth more because more of them got lost or destroyed over time so it got more rare.
Assumption. That can happen because the athlete has a very good season, or even becomes famous/infamous for an unrelated reason.
In other words, you’re assuming it’s because supply went down, but it can also be that demand went up. Or a combination.
But that’s beside the point, which is that its value changing has zero impact on what’s in others’ wallets. Because it’s a price tag. Not an amount of actual money.
But, once the valuation is realized… then it has done all the things I said. So yes, if you only ever buy stocks and never sell them, you have never gained money that came from somewhere else… but you also haven’t become rich then.
Which it hasn’t, in the case I’m referring to, where it’s being claimed that net worth increases = equivalent decreases in others’ cash reserves.
The notion that the world’s wealth is zero sum (which is required to believe the foolishness above), when it’s exceedingly obvious that new wealth is created constantly, is a display of blatant ignorance of basic economics.
What case are you referring to? The initial comment was on how the stock market transfers wealth from poor people to rich people over time. There was no individual referred case.
While new wealth is also theoretically created, that doesn’t change the fact that it is also coming from people that don’t do well on the stock market, which is the vast majority numerically. It very much is just gambling for them, against the “house”.
You are correct but this point can be overextended. When the stock market crashes, companies lay people off, retirees’ income goes down, interest rates and prices shift.
The stock market isn’t the economy. But it is connected to almost everything in the economy, and regular people are affected by it: it isn’t just a casino for billionaires.l (although it is certainly that).
A casino where the high rollers get bailed out in big losses by both parties now, just a few more trillions on the credit card and zero interest loans via the fed every time a big crash happens.
The stock market is not economic security or mobility, housing security, quality of life or education, standard of living … or everything else that actually matters to 99% of the human population.
The stock market isn’t even “the economy”. It’s literally just an indicator of how much more wealthy the wealthiest have grown over a period of time.
I’m no economist, but isn’t the stock market more an indicator of what the wealthy think will happen in the near future?
The stock market is just a way for people with more money to slowly take money away from people with less money, while the people with less money feel like they have a chance of winning. For poor people it is basically gambling, and for rich people it is basically owning the casino.
There are so many built-in structures to the way it operates to favour the flow of money to larger holders over time.
Also it’s only slow for the rich people, for the poor people it can happen in an instant.
A stock price isn’t “money”. It is, literally, a price tag. The price of a stock going up does not take actual money out of anyone’s wallet.
If my $5 baseball card becomes worth $100 as time passes while I continue to possess it, do you seriously believe I’ve now done the equivalent of stealing $95?
Your baseball card became worth more because more of them got lost or destroyed over time so it got more rare. So the increase in value came from all the people that lost their 5 dollar card. And also partially from inflation.
Completely different from the stock market.
The money from the stock market comes primarily from other investors. You may not be directly taking it from them, but there are only a few layers of abstraction between them putting money into a stock that went down and you taking money out of a stock that went up.
But the main advantage rich people have in the stock market is less latency in their trades and more weight to swing around. Not to mention being much more likely to have insider info, but even without actually cheating they have quite a few advantages that tip it in their favour.
Assumption. That can happen because the athlete has a very good season, or even becomes famous/infamous for an unrelated reason.
In other words, you’re assuming it’s because supply went down, but it can also be that demand went up. Or a combination.
But that’s beside the point, which is that its value changing has zero impact on what’s in others’ wallets. Because it’s a price tag. Not an amount of actual money.
But, once the valuation is realized… then it has done all the things I said. So yes, if you only ever buy stocks and never sell them, you have never gained money that came from somewhere else… but you also haven’t become rich then.
Which it hasn’t, in the case I’m referring to, where it’s being claimed that net worth increases = equivalent decreases in others’ cash reserves.
The notion that the world’s wealth is zero sum (which is required to believe the foolishness above), when it’s exceedingly obvious that new wealth is created constantly, is a display of blatant ignorance of basic economics.
What case are you referring to? The initial comment was on how the stock market transfers wealth from poor people to rich people over time. There was no individual referred case.
While new wealth is also theoretically created, that doesn’t change the fact that it is also coming from people that don’t do well on the stock market, which is the vast majority numerically. It very much is just gambling for them, against the “house”.
You are correct but this point can be overextended. When the stock market crashes, companies lay people off, retirees’ income goes down, interest rates and prices shift.
The stock market isn’t the economy. But it is connected to almost everything in the economy, and regular people are affected by it: it isn’t just a casino for billionaires.l (although it is certainly that).
A casino where the high rollers get bailed out in big losses by both parties now, just a few more trillions on the credit card and zero interest loans via the fed every time a big crash happens.
How much pretend wealth exists as measured by recent trades of stock.
It is divorced from reality and fundamentals and the intrinsic value is a fraction of market caps.
The indexes measure investor confidence in future stock price movements.