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It's not that simple. Buying $500k of stocks does not mean you gave $500k to a company to use unless the stocks were bought directly from them. More likely it w
by Slippery_John 6y ago
It's not that simple. Buying $500k of stocks does not mean you gave $500k to a company to use unless the stocks were bought directly from them. More likely it was bought from another investor with cold feet, and at best the company benefited from the increased stock price generated by the demand.
- bluecalm 6y agoYeah but the reason companies are able to raise as much money with stock issuance is the promise of liquidity thus providing liquidity is valuable. This example isn't a problem either. Someone made 700k at the cost of someone else, likely an over-leveraged players who were forced to liquidate because of the threat of the pandemic. The market is far from efficient and the swings in prices are unavoidable. Normal long term investors didn't lose much if anything during this crash. The government got a cut because of money changing hands. If anything one could ask why is the government getting anything if no value was created.
- itake 6y agoThe problems people have with the rich are that there are 2 ways you can make money: A/ sell time B/ buy/sell assets One of these is heavily taxed, the other is not. One of these produces value to society and the other does not. I acknowledge that some "time sellers" don't produce value, but _on average_ most time sellers are producing something positive.