7 ms·
What Is the Stock Market Even for Anymore?
- pdubs1 6y agoWhat a silly question for an article title. I used to have respect for NYT. That was a long, long time ago. Now I ask "Who reads this sensationalist junk?"
- kgin 6y agoThere is the famous Benjamin Graham quote, "In the short run, the market is a voting machine but in the long run, it is a weighing machine." This article is trying to say "I think the stock market is broken because it should be a weighing machine at all times, including of factors that aren't being weighed". That's a fine argument, but it's misunderstanding how the stock market has worked up until now.
- nine_zeros 6y agoIt's a game that is so overweighted on money printed, that no other events in the game matter anymore.
- nugget 6y agoIf I want to invest my money somewhere it will earn a return, what are my options? Bonds, CDs, and other fixed income pay very little. "What about a 50% crash?" people ask (about equity-heavy portfolios.) Given that the Fed has seemingly adopted an additional mandate of supporting equity prices (see: 2009, 2012, 2016, 2020), I don't think there's any political will for a sustained dip in equity prices; therefore, the most rational choice seems to be to invest into the market.
- toomuchtodo 6y ago“TINA”, or “There is no alternative.” to equities. https://www.nytimes.com/2019/07/11/business/stock-market-record.html https://www.nytimes.com/2019/07/11/business/stock-market-rec...
- lujim 6y agoIt is an equity exchange where investors, tax payers, the Federal government, and the fixed income market subsidize stock buy backs and executive bonuses. I'm joking but it is alarming how many resources we seem to be sacrificing for a meager 5-7% average ROI. We are trying to eliminate market corrections at the expense of ??? who knows. It's cheap capital for business that are probably creating too many services and products that don't add a ton of value to anyone's lives.
- sesuximo 6y agoSlightly OT: I feel like the NYT is no longer breaking big stories/going deep on little known things. Recently it feels so opinionated and not nuanced at all. Maybe I only think this because I disagree with a few of the most recent articles I’ve read, but I wonder if others agree with me (or not).
- kccqzy 6y agoWell this is the NYT Magazine, not the NYT proper.
- sesuximo 6y agoFair point for this case
- _bxg1 6y agoI subscribed for a while and felt the same way. The headlines were mostly emotionally-charged rehashing of what everyone else was covering. If you want unemotional summaries of what everyone else is covering, I really like NPR (they have written articles on npr.org)
- sesuximo 6y agoI’ll check that out thanks
- bawana 6y agoNo matter how much qe the fed does , there will be no inflation. The money goes to banks and financial institutions. They do not spend it on real goods and services. Rather they implement financial tools to get higher roi. Thus too many dollars chase too few financial tools resulting in equity inflation (a rising stock market) The real market of goods and services is unmoved and as a result wages and prices are stable (stagnant). The fed only helps banks because they use a system designed in the 1930s. Back then before credit cards, internet banking, before the repeal of Glass Steagall, banks drove the economy by lending to people. (See ‘It’s a Wonderful 𝐋𝐢𝐟𝐞’) To move the economy, the fed has to put money into the hands of people who will spend it. Each taxpayer should get a fed account with a monthly stipend of fed-coin. Fed-coin will have a half-life to encourage people to spend it. Once spent its value will be fixed as it gets converted to regular dollars
- deleted 6y ago[deleted]
- mixmastamyk 6y agoI disagree there will be no inflation. But, it is an indirect effect as you describe. The half-life idea is intriguing however.
- gen3 6y agoThe inflation after 2008 was low, and we pumped in a ton of cash in then. I don’t know how everything will end up, but I don’t think massive inflation is guaranteed.
- mixmastamyk 6y agoThe inflation was in assets, real estate, medicine, education, etc. Some consumer goods went down. Guess which the indexes count? This time they'll pump in an order of magnitude more cash.
- skrtskrt 6y ago
- originalvichy 6y agoAs a finance and stock market novice, it makes a lot of sense. Buybacks seem like one of the main contributors to the funneling of money from the working class to the ownership class. Is there any way you can ”win”? Staying privately traded and owned?
- mixmastamyk 6y agoIt's just a more tax-efficient way of distributing dividends. Like how water tends to find the lowest point. Describing it in class-warfare terms is not necessarily helpful, as the poor were never participants.
- woodandsteel 6y agoIt may not be intentional class warfare, but it has the same consequences. The rationale for lowering taxes was to make it possible for corporations to invest more and produce lots of better-paying jobs. Instead they took the money and invested it in stock buy-backs, which benefit only the stock-holders.
- foldingmoney 6y agoI mean, the mandate of a public company is _only_ to benefit the stockholders by increasing the stockholders' wealth. The question is whether they do that via growing the business or via returning money to stockholders. The choice to buy back stock just reflects the apparent lack of good investment opportunities in the market.
- woodandsteel 6y agoThe question not if as a corporation they should be doing that, the question is if the tax cuts should have been passed when the corporations were not going to do what the tax cutters promised would happen.
- foldingmoney 6y ago