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> The implication (by the choice of words here) 'call you to convince you of the desirability of paying them several hundred dollars to place a single stock tra

> The implication (by the choice of words here) 'call you to convince you of the desirability of paying them several hundred dollars to place a single stock trade' implies incorrectly that retail brokers were not in some way able to earn that money by providing value. If that were the case they would not exist and money would flow elsewhere. The market doesn't correct itself overnight. In fact the market share of retail brokers has plummeted since the invention of index funds and now discount brokerages, suggesting that they were not providing that value.

bluGill 7y ago
I would change that to not providing enough value. If good advice saves you $70 was it worth $700?
- jdminhbg 7y ago
  That's basically where I'm going with "not providing that value." Much like if I charge you $20 for a McDonald's cheeseburger, you're not getting nothing in return, but you're not getting $20 of value.
gist 7y ago
It suggests that there are not enough people to make it worth the while of someone to be in that business. In that sense it is not like the market for horses (for specifically) transportation. For that your statement would be true. For stocks I would argue that you need a certain critical mass of customers to make it worthwhile to be a stock broker. Let's use the travel agent example. There are people that would like to use a travel agent located at their local shopping center. Back in the day there were enough of those people that a agent could be busy and therefore afford the overhead of a business to service them. Now there are not enough people so the agent is not in business. However that is not because the travel agent does not provide value (what you are claiming for the stock broker). It's because there are not enough people that the agent can earn a living doing so. So it's not the value in this case (although it might be in other cases or for other things).

bluGill 7y ago

I would change that to not providing enough value. If good advice saves you $70 was it worth $700?

jdminhbg 7y ago
That's basically where I'm going with "not providing that value." Much like if I charge you $20 for a McDonald's cheeseburger, you're not getting nothing in return, but you're not getting $20 of value.

gist 7y ago

It suggests that there are not enough people to make it worth the while of someone to be in that business. In that sense it is not like the market for horses (for specifically) transportation. For that your statement would be true. For stocks I would argue that you need a certain critical mass of customers to make it worthwhile to be a stock broker. Let's use the travel agent example. There are people that would like to use a travel agent located at their local shopping center. Back in the day there were enough of those people that a agent could be busy and therefore afford the overhead of a business to service them. Now there are not enough people so the agent is not in business. However that is not because the travel agent does not provide value (what you are claiming for the stock broker). It's because there are not enough people that the agent can earn a living doing so. So it's not the value in this case (although it might be in other cases or for other things).