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This is only the case for pump&dump schemes. In case of a sustained growth of a company (think Apple over the past 20 years) what the shareholders gain comes f
by botman_ 5y ago
This is only the case for pump&dump schemes.
In case of a sustained growth of a company (think Apple over the past 20 years) what the shareholders gain comes from the earnings of the company. Apple shareholders have gained trillions in the past years - no one has lost an equivalent amount.
- baby 5y agoI’m not sure what your point is. Are you talking about a small fraction of stocks that pay dividends? Because otherwise the stock market is completely based on this: money changing hands.
- SgtBastard 5y agoYou’ve conveniently ignored reinvested dividends that in turn fund future growth, splits, reverse splits, mergers and acquisitions... That’s a very weak strawman.
- baby 5y agoMoney changing hands changing hands that makes it look like it’s totally legit. Copy that.
- dnautics 5y agoBuybacks are also a mechanism of connecting stock price to company performance, but arguably that is also tenuous and rare, except for the last few years when several companies have done buybacks. Oh, and in other direction, bankruptcy.
- WA 5y agoYes, sustained growth of Apple over the past 20 years makes buying Apple stock an investment. Shareholder gains come either from dividends or stock buybacks (which is kinda the same), but not every uptick in the stock price is because of value creation. Some stock price movements are also zero-sum. Active trading is zero-sum.