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> Why must every part of the world be regulated into safety for the common man? That's not really their concern, they're pathological hypocrites in reality. Th

> Why must every part of the world be regulated into safety for the common man? That's not really their concern, they're pathological hypocrites in reality. They're very happy to keep state sanctioned lotteries plentiful and legal, so the common person can blow their financial brains out handing their hard-earned cash to the government in a scheme that specifically benefits the government (they get you on the tickets, then they get you on a massive tax hit on the win). Unregulated penny stocks are not worse for the common person than government controlled lotteries that vaporize so much money for average people; arguable lotteries are far worse, your odds of winning might as well be zero. They absolutely do not care about the so called common man, not in the least. They care about control, power; they care about who has it, who has access to it, and who gets to sell it to the highest bidder.

sethhochberg 6y ago
This framing makes the whole thing sound like a nefarious plot, but I suspect the reality is more simple: you can't pump-and-dump a lottery, the draw is tightly controlled. The parts of the penny stock / meme stock world that are drawing lots of negative attention right now are the online communities where anonymous people are giving plenty of "not financial advice" and disclaiming it away with a statement like "do your own DD" (due diligence). Obviously, yes, you should do your own due diligence when acting on a stock tip from a stranger. But even that assumes that the stranger's tip was made in good faith, and wasn't just designed to help them unload something they bought and want to get rid of profitably by hyping a market to unsavvy buyers. With a lotto, you can see the projected winnings, know the draw date, and usually even know how many other people are buying tickets. With penny stocks from reddit, there's a decent chance the guy offering the tip about which stock to buy plans to exit long before his target price, because he strung together a plausible hype pitch to trick you into getting stuck holding the bag. The state is usually prevented from lying about possible winnings to sell more lotto tickets. I'm not sure whether more regulation for retail investors is a good thing or not. But I do think it isn't a very genuine comparison to say that regulating financial markets is a farce because lotteries exist, there is much more information asymmetry in retail stock trades.
- Apocryphon 6y ago
  The government is also not a monolithic entity, the officials trying to regulate OTC stocks are not the ones running lotteries, and they're not even at the same level of government! What do the money-raising schemes of states have anything to do with federal regulators?

sethhochberg 6y ago

This framing makes the whole thing sound like a nefarious plot, but I suspect the reality is more simple: you can't pump-and-dump a lottery, the draw is tightly controlled. The parts of the penny stock / meme stock world that are drawing lots of negative attention right now are the online communities where anonymous people are giving plenty of "not financial advice" and disclaiming it away with a statement like "do your own DD" (due diligence). Obviously, yes, you should do your own due diligence when acting on a stock tip from a stranger. But even that assumes that the stranger's tip was made in good faith, and wasn't just designed to help them unload something they bought and want to get rid of profitably by hyping a market to unsavvy buyers. With a lotto, you can see the projected winnings, know the draw date, and usually even know how many other people are buying tickets. With penny stocks from reddit, there's a decent chance the guy offering the tip about which stock to buy plans to exit long before his target price, because he strung together a plausible hype pitch to trick you into getting stuck holding the bag. The state is usually prevented from lying about possible winnings to sell more lotto tickets. I'm not sure whether more regulation for retail investors is a good thing or not. But I do think it isn't a very genuine comparison to say that regulating financial markets is a farce because lotteries exist, there is much more information asymmetry in retail stock trades.

Apocryphon 6y ago
The government is also not a monolithic entity, the officials trying to regulate OTC stocks are not the ones running lotteries, and they're not even at the same level of government! What do the money-raising schemes of states have anything to do with federal regulators?