4 ms·

This is my personal opinion: The stock market system is obsolete and needs to be revamped for the online world where the world's population is always on, and co

This is my personal opinion: The stock market system is obsolete and needs to be revamped for the online world where the world's population is always on, and connected. I have been looking for other ways to invest than putting my money in the stock market. Luckily today there are new ways to invest that were not available 20 years ago. I think way too many stocks' prices are disconnected from their actual value (or even future value). To some extent, the stock market has become a legal gambling platform. Also the market is biased towards the professional traders and it's not serving the average person that worked hard for their small money and it's way too easy to loose a big chunk of your $$$. Also, i would have loved to see the article talk about the increase in private investments (ie VCs and Angels) Elon Musk said it himself: he tried his hardest to keep Tesla private but he just couldn't, he had to let go and IPO. He swore to not make that mistake again with SpaceX (more here: https://www.quora.com/Why-did-Elon-Musk-make-Tesla-go-IPO-but-not-SpaceX https://www.quora.com/Why-did-Elon-Musk-make-Tesla-go-IPO-bu...)

baxtr 8y ago
How do you imagine smart scale investors to participate then? The rich getting even richer by keeping all successful startups private? I don’t wanna live in that world
- yohann305 8y ago
  I never said i had a solution to any financial markets problems. I just pointed out things that irritated me. Maybe someone here has a better picture and could start Stock Market 2.0 for the digital age
  - ianai 8y ago
    The digital age allows for actual ubiquitous information. A new start at a stock market could require public companies to operate completely in the open - zero asymmetric information. It’s a radical idea I just had, so it’s not a fully formed idea. But information does concentrate power and thus wealth.
- walshemj 8y ago
  Invest in PE/VC funds/trusts. I did very well out of a Uk listed one that was on a massive discount (electra ELTA) I would have hit the tax free limit for divi income on a single stock investment of £2k.
- nutek 8y ago
  Tokenization of assets
  - wcarron 8y ago
    In what world does this solve anything? Tokenize it! You mean assign the worth of an asset to an arbitrary symbol of value? Like, say....a dollar?
    - nutek 8y ago
      It's simpler and cheaper to buy and sell tokens than complex paper contracts. It also works better for small amounts of money. The difference in owning a token of a real estate to owning a dollar is that the token owner is entitled a fraction of the rental income and enhancement of value. https://www.nasdaq.com/article/how-tokenization-is-putting-real-world-assets-on-blockchains-cm767952 https://www.nasdaq.com/article/how-tokenization-is-putting-r...
prklmn 8y ago
Don't be fooled, the stock market has always been a legal gambling platform. Investing is a form of gambling with hopefully better odds.
- yohann305 8y ago
  totally agree. I may add that with the emergence of super computers and data mining, the dice has never been more piped in favor of big companies than ever.
  - ianai 8y ago
    I don’t understand how someone could overlook that the stock markets are all gambling.
    - walshemj 8y ago
      And what do you base this "challenging "assertion on? Its not gambling to take advantage of special situations eg the overhang on WTAN 18 moths ago where its discount was artificially high. If you had said binary bets are gambling but I would agree with you. Maybe this what the 1% want you to think ?
    - cmurf 8y ago
      The metaphor is completely specious. Every game in gambling is either you win or you lose, it's completely binary. And you own nothing. Stocks, you own a part of a business, and there's effectively no chance it goes to $0 value on a single "hand". Maybe you could lose 30% on a bad day, as an on paper "loss", but you hold it or buy more, and in the long run you will end up ahead. The odds are biased in your favor with stocks, they are biased against you with gambling. And the stock market offers the option to reduce volatility through diversification. You have no such option with gambling. Only rather superficially, if you're randomly choosing stocks, randomly buying and selling them, then maybe on the surface they both seem like they have similar odds. But they really don't.
2trill2spill 8y ago
> This is my personal opinion: The stock market system is obsolete and needs to be revamped for the online world where the world's population is always on, and connected. > I have been looking for other ways to invest than putting my money in the stock market. Luckily today there are new ways to invest that were not available 20 years ago. I think way too many stocks' prices are disconnected from their actual value (or even future value). Good luck retiring. It's seems like this attitude is growing in the United States[1] which is unfortunate because lot's of people will be working through their "retirement" years. [1]: https://www.cnbc.com/2018/05/16/gallup-why-younger-americans-arent-investing-in-the-stock-market.html https://www.cnbc.com/2018/05/16/gallup-why-younger-americans...
- walshemj 8y ago
  And why would "always on, and connected" change the way the stock market works ? Constantly checking and panicking about a single days loss is a route to failure as an investor.
fullshark 8y ago
Can you expand on your first paragraph? Sounds like you think there should be a global stock market that’s open 24 hours? Or do you think the concept of public listing of companies is outdated as a whole?
paulpauper 8y ago
I think way too many stocks' prices are disconnected from their actual value (or even future value). Ppl have been saying that for years. It's possible for future values to increase. That was what happened in 2016-2018. In 2015 profits had been to flat line, and then they inexplicably began to rise in 2017, breathing new life into the market. I would rather invest in a slightly overvalued market than miss out, especially giving how terrible people are at timing the market. Had you sold in 1996, when the market was already getting overvalued, you would have never ever been able to buy back at a cheaper price.
- kgwgk 8y ago
  That's only true if after selling you kept the cash under the mattress. If you sold the SPY S&P 500 ETF in January 1996 and invested the proceeds in the Treasury-heavy Vanguard Total Bond Market Index fund (there were no bond ETFs back then) you would have seen better entry points waiting for you in the future: 10% discount in Q4 2002 and Q1 2003. 30% discount in Q1 2009
kasey_junk 8y ago
By what metric is the market more biased towards professional traders? By the metrics of cost to trade, spread, barriers to entry, expense ratio etc. it’s never been better to be a small scale investor. You have more opportunity to trade now, in more markets, with more information & instrument options, for cheaper than ever.
sigi45 8y ago
What else is there? Biggest producers of most consumed products are on the stock market. People buy procter & gamble stocks because everyone is buying the products.
paulpauper 8y ago
The S&P 500 has good risk -adjusted returns. Look at Bitcoin, which fell 70% this year. People are always looking for the next big thing, and often these fall short.
st26 8y ago
The Elon Musk style private founder is not really a new thing. Plenty of companies have been started & run privately, and in Elon's case there is a strong argument for that- it gives the founder more control of the company which can be necessary for the success of a risky business. Dell's privatizations comes to mind. It was taken private temporarily, not to hoard all the gains, but to allow a single stakeholder to call all the shots and attempt a turnaround. Now it's going public again.
- walshemj 8y ago
  Or dell is in the option of insiders under valued and you can take it private at a discount the a few years go ipo again and make $bank.

baxtr 8y ago

How do you imagine smart scale investors to participate then? The rich getting even richer by keeping all successful startups private? I don’t wanna live in that world

yohann305 8y ago
I never said i had a solution to any financial markets problems. I just pointed out things that irritated me. Maybe someone here has a better picture and could start Stock Market 2.0 for the digital age
- ianai 8y ago
  The digital age allows for actual ubiquitous information. A new start at a stock market could require public companies to operate completely in the open - zero asymmetric information. It’s a radical idea I just had, so it’s not a fully formed idea. But information does concentrate power and thus wealth.
walshemj 8y ago
Invest in PE/VC funds/trusts. I did very well out of a Uk listed one that was on a massive discount (electra ELTA) I would have hit the tax free limit for divi income on a single stock investment of £2k.
nutek 8y ago
Tokenization of assets
- wcarron 8y ago
  In what world does this solve anything? Tokenize it! You mean assign the worth of an asset to an arbitrary symbol of value? Like, say....a dollar?
  - nutek 8y ago
    It's simpler and cheaper to buy and sell tokens than complex paper contracts. It also works better for small amounts of money. The difference in owning a token of a real estate to owning a dollar is that the token owner is entitled a fraction of the rental income and enhancement of value. https://www.nasdaq.com/article/how-tokenization-is-putting-real-world-assets-on-blockchains-cm767952 https://www.nasdaq.com/article/how-tokenization-is-putting-r...

prklmn 8y ago

Don't be fooled, the stock market has always been a legal gambling platform. Investing is a form of gambling with hopefully better odds.

yohann305 8y ago
totally agree. I may add that with the emergence of super computers and data mining, the dice has never been more piped in favor of big companies than ever.
- ianai 8y ago
  I don’t understand how someone could overlook that the stock markets are all gambling.
  - walshemj 8y ago
    And what do you base this "challenging "assertion on? Its not gambling to take advantage of special situations eg the overhang on WTAN 18 moths ago where its discount was artificially high. If you had said binary bets are gambling but I would agree with you. Maybe this what the 1% want you to think ?
  - cmurf 8y ago
    The metaphor is completely specious. Every game in gambling is either you win or you lose, it's completely binary. And you own nothing. Stocks, you own a part of a business, and there's effectively no chance it goes to $0 value on a single "hand". Maybe you could lose 30% on a bad day, as an on paper "loss", but you hold it or buy more, and in the long run you will end up ahead. The odds are biased in your favor with stocks, they are biased against you with gambling. And the stock market offers the option to reduce volatility through diversification. You have no such option with gambling. Only rather superficially, if you're randomly choosing stocks, randomly buying and selling them, then maybe on the surface they both seem like they have similar odds. But they really don't.

2trill2spill 8y ago

> This is my personal opinion: The stock market system is obsolete and needs to be revamped for the online world where the world's population is always on, and connected. > I have been looking for other ways to invest than putting my money in the stock market. Luckily today there are new ways to invest that were not available 20 years ago. I think way too many stocks' prices are disconnected from their actual value (or even future value). Good luck retiring. It's seems like this attitude is growing in the United States[1] which is unfortunate because lot's of people will be working through their "retirement" years. [1]: https://www.cnbc.com/2018/05/16/gallup-why-younger-americans-arent-investing-in-the-stock-market.html https://www.cnbc.com/2018/05/16/gallup-why-younger-americans...

walshemj 8y ago
And why would "always on, and connected" change the way the stock market works ? Constantly checking and panicking about a single days loss is a route to failure as an investor.

fullshark 8y ago

Can you expand on your first paragraph? Sounds like you think there should be a global stock market that’s open 24 hours? Or do you think the concept of public listing of companies is outdated as a whole?

paulpauper 8y ago

I think way too many stocks' prices are disconnected from their actual value (or even future value). Ppl have been saying that for years. It's possible for future values to increase. That was what happened in 2016-2018. In 2015 profits had been to flat line, and then they inexplicably began to rise in 2017, breathing new life into the market. I would rather invest in a slightly overvalued market than miss out, especially giving how terrible people are at timing the market. Had you sold in 1996, when the market was already getting overvalued, you would have never ever been able to buy back at a cheaper price.

kgwgk 8y ago
That's only true if after selling you kept the cash under the mattress. If you sold the SPY S&P 500 ETF in January 1996 and invested the proceeds in the Treasury-heavy Vanguard Total Bond Market Index fund (there were no bond ETFs back then) you would have seen better entry points waiting for you in the future: 10% discount in Q4 2002 and Q1 2003. 30% discount in Q1 2009

kasey_junk 8y ago

By what metric is the market more biased towards professional traders? By the metrics of cost to trade, spread, barriers to entry, expense ratio etc. it’s never been better to be a small scale investor. You have more opportunity to trade now, in more markets, with more information & instrument options, for cheaper than ever.

sigi45 8y ago

What else is there? Biggest producers of most consumed products are on the stock market. People buy procter & gamble stocks because everyone is buying the products.

paulpauper 8y ago

The S&P 500 has good risk -adjusted returns. Look at Bitcoin, which fell 70% this year. People are always looking for the next big thing, and often these fall short.

st26 8y ago

The Elon Musk style private founder is not really a new thing. Plenty of companies have been started & run privately, and in Elon's case there is a strong argument for that- it gives the founder more control of the company which can be necessary for the success of a risky business. Dell's privatizations comes to mind. It was taken private temporarily, not to hoard all the gains, but to allow a single stakeholder to call all the shots and attempt a turnaround. Now it's going public again.

walshemj 8y ago
Or dell is in the option of insiders under valued and you can take it private at a discount the a few years go ipo again and make $bank.