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Just to play devil's advocate on this, the money in the stock market (i.e. any stock transaction outside of a public offering) is generally not being invested i
by JonFish85 9y ago
Just to play devil's advocate on this, the money in the stock market (i.e. any stock transaction outside of a public offering) is generally not being invested in companies that actually build things, it's getting stored.
- yohann305 9y agoi totally agree, i am not a big fan of the stock market, we need investing 2.0, we have the tools, we just need the "Elon Musk" of finance
- criddell 9y agoIt's stored, but isn't it also being loaned out as well? Isn't that part of how the money supply grows - fractional reserve?
- JonFish85 9y ago"isn't it also being loaned out as well" Hm? In the stock market, you pay a current stockholder for their share(s). The company sees no money from the transaction. It sounds like what you're thinking of is banking, which is something different.
- vasilipupkin 9y agoincorrect. the company sees money from the transaction in several indirect ways. the existence of the market is what enabled the company to go public in the first place.
- hndamien 9y agoThey also see money from the increased valuation of the stock they are still holding. This can be used to be borrowed against or sold.
- criddell 9y agoI was mostly thinking about brokers. If I buy stock and hold it in my brokerage account, doesn't the brokerage use that money and stock to generate even more wealth? For example, they might loan my stock to somebody that wants to short that company.
- blibble 9y agonot really true, your broker will often lend out your shares for a fee or use them as collateral for their own business