In defense of the market
This is a response to Lukas’ post over here… I hate blogging about comments I make on other blogs, but I also like to keep semi-coherent blog entries under my roof, so that I can have them should I ever need to refer back to them.
I am not a stock broker, but spend all my working hours with them.
There is nothing wrong with the stock market, the problem is simply with capitalism and greed.
I can’t agree with you on condemning the stock market for bad company decisions. Once you have opened your company up to private investments it is truly out of your hands. Although I do agree that it’s the very big players who make the power moves and the small players who loose the money.
A typical example of the volatility of the stock market was the crazy last week. A lot of the best stocks got hit the hardest, not because there was anything wrong with the company but because some big players lost a LOT of money on other stocks, and had to sell off their earning stocks to cover their margin calls. This sent perfectly good stocks into free fall and lost a lot of small investors a lot of money.
Yay capitalism!
I forgot who said this, but a great investment is to buy a lot of gold, and bury it in a hole (that’s actually not that good advice… since you’re going to pay a lot of tax… better go with a gold ETF).
