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I hate the stock market almost as much as I respect it as an incredible tool. The further out you can guarantee future rewards in exchange for labor and materia

I hate the stock market almost as much as I respect it as an incredible tool. The further out you can guarantee future rewards in exchange for labor and materials, the more prosperous your society will be, and we've seen that in spades. The Dutch invented the concept of common-stock and became the masters of the sea in no time flat; I wouldn't be surprised if the progress (if that's what you believe it is) of the Europeans in philosophy and government was engaged in a feedback loop with the ability of the "common man" to tie his own fortunes into the engines of commerce, rather than into his own social status. At the same time, it feels infuriating that in order to afford medicine, clothes, food, shelter, and defense once you're past your working prime you must attach your fortunes to companies that have very little to do with the actual services you require in retirement. Personally, I think that the American middle class has been totally taken hostage by Wall Street via the 401(k) and the IRA; anything that threatens "market performance" (e.g. a series of metrics made up and owned by the market owners) threatens their ability to provide for themselves. In this way, any serious large-scale action that might mend a social ill is off the table if its implementation damages large-scale market performance.

kgin 5y ago
2/3 of Americans don’t have and will never have a 401k or IRA.
AlanSE 5y ago
> At the same time, it feels infuriating that in order to afford medicine, clothes, food, shelter, and defense once you're past your working prime you must attach your fortunes to companies that have very little to do with the actual services you require in retirement. This feels like the worst possible argument against public corporations. There's a whole sector of the stock market for health care, and you can easily buy funds that only invest in that. What other services to retirees need? You will be able to find listed companies providing all of those services. There are some technical imperfections in a basket of equities. If your intention is to exactly hedge living costs, then you would also seek to own bonds from those companies, much of the economy is not public, and so on. There are valid points to be found, I don't think these are what you're concerned about. In the big picture, owning the means of production is the only game that makes sense. What's the alternative? The best store of value is a collection of things that people are paying for, because that's central to the economic definition of value. Otherwise, everything is gold or bitcoin.
- ff317 5y ago
  Part of the problem is that most 401Ks have a very limited set of investment options. You get a short menu of choices arbitrated by a clueless HR person at your company and the self-interested financial company that manages the 401K plan: a bunch of standard mutual funds and index funds, some are semi-targeted (e.g. large-cap vs small-cap, whole-market, foreign-vs-domestic, target-date, tech?). If you're lucky, there might be a couple of different bond funds, and maybe a money market option to park cash temporarily. There's not often the flexibility of a regular investment fund (e.g. an etrade account) to go after other specific options or individual stocks and bonds, or especially any kinds of commodities, futures, options, etc. I get the rationale: it's set up that way so that it's a "safer" investing option, because they're afraid people will make bad choices and lose their 401K balances. But the flipside is you don't get much flexibility in making the wisest or most self-interested investment decisions. The 401K -managing firms love it though, as they get to sell a bunch of funds that are often in-house and have fees, and the real free-market-trading investors like it because the 401Ks put a bunch of very predictably-timed money into predictably-common choices, and they can rely on this to gain a little advantage/arbitrage.
  - quacked 5y ago
    Related: https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/ That site gets tossed around like candy and I don't think every graph they throw up is perfectly explainable by their central point, but what the invention of the 401(k) and IRA, both of which were released to the public only after the gold standard had finally been abandoned, really did was to allow wealth managers to pump completely unimaginable quantities of money into abstractions of value that are not actually related with physical wealth that materializes for Americans in the form of skills, a strong manufacturing industry, and robust supply chains. Michael Burry (Big Short guy) notes that the amount of money stored in indexes and funds tracking the S&P 500 are many orders of magnitude larger than the money that actually moves around between the shares of the S&P 500 companies themselves.
  - anamax 5y ago
    > Part of the problem is that most 401Ks have a very limited set of investment options. Once you're retired, you can roll your 401K into a self-directed IRA which you can invest with not many restrictions. For example, you can put all your money into hospital stocks.
whimsicalism 5y ago
One big issue I have with the market - and not one that I really know how to address, is that it seems like it has provided an easy mechanism to launder wealth intergenerationally that was acquired through incredibly unjust means. Just as a single example, many of the descendants of the merchants who made their wealth off of even something as far back as the Middle Passage [0] or supporting slavery in the US are often in elevated status today (both politically and with wealth). Wealth diffuses with time and transactions, but still - it spreads outwards from social proximity. [0]: https://en.wikipedia.org/wiki/Middle_Passage https://en.wikipedia.org/wiki/Middle_Passage
- Kranar 5y ago
  How was the stock market involved in this laundering? At any rate, today's markets are quite rigorously monitored so that the provenance of any single share is reasonably well established.
  - whimsicalism 5y ago
    First - the "market" is not just for equity, there are markets in plenty of things. > today's markets are quite rigorously monitored Wealth acquired by slavery (or descendents of feudal nobility) can absolutely be used to purchase a stock. Unclear what you mean by the provenance of the share - I am talking about unethically acquired money used to buy ownership which is then "laundered" through ownership stakes in legitimate companies.
vineyardmike 5y ago
> it feels infuriating that in order to afford medicine, clothes, food, shelter, and defense once you're past your working prime you must attach your fortunes to companies that have very little to do with the actual services you require in retirement. This seems like an incredibly weak argument for an incredibly good point. Its crazy that you must attach your fortune to companies that have very little to do with you in general. A wealth manager, or annuity or other similar service (pension) seem like a very reasonable (conceptually) place to attach your wealth - their job is to provide for your retirement. Saying "buy stock market indexes and government debt" seems like a very indirect way to hedge your retirement.

kgin 5y ago

2/3 of Americans don’t have and will never have a 401k or IRA.

AlanSE 5y ago

> At the same time, it feels infuriating that in order to afford medicine, clothes, food, shelter, and defense once you're past your working prime you must attach your fortunes to companies that have very little to do with the actual services you require in retirement. This feels like the worst possible argument against public corporations. There's a whole sector of the stock market for health care, and you can easily buy funds that only invest in that. What other services to retirees need? You will be able to find listed companies providing all of those services. There are some technical imperfections in a basket of equities. If your intention is to exactly hedge living costs, then you would also seek to own bonds from those companies, much of the economy is not public, and so on. There are valid points to be found, I don't think these are what you're concerned about. In the big picture, owning the means of production is the only game that makes sense. What's the alternative? The best store of value is a collection of things that people are paying for, because that's central to the economic definition of value. Otherwise, everything is gold or bitcoin.

ff317 5y ago
Part of the problem is that most 401Ks have a very limited set of investment options. You get a short menu of choices arbitrated by a clueless HR person at your company and the self-interested financial company that manages the 401K plan: a bunch of standard mutual funds and index funds, some are semi-targeted (e.g. large-cap vs small-cap, whole-market, foreign-vs-domestic, target-date, tech?). If you're lucky, there might be a couple of different bond funds, and maybe a money market option to park cash temporarily. There's not often the flexibility of a regular investment fund (e.g. an etrade account) to go after other specific options or individual stocks and bonds, or especially any kinds of commodities, futures, options, etc. I get the rationale: it's set up that way so that it's a "safer" investing option, because they're afraid people will make bad choices and lose their 401K balances. But the flipside is you don't get much flexibility in making the wisest or most self-interested investment decisions. The 401K -managing firms love it though, as they get to sell a bunch of funds that are often in-house and have fees, and the real free-market-trading investors like it because the 401Ks put a bunch of very predictably-timed money into predictably-common choices, and they can rely on this to gain a little advantage/arbitrage.
- quacked 5y ago
  Related: https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/ That site gets tossed around like candy and I don't think every graph they throw up is perfectly explainable by their central point, but what the invention of the 401(k) and IRA, both of which were released to the public only after the gold standard had finally been abandoned, really did was to allow wealth managers to pump completely unimaginable quantities of money into abstractions of value that are not actually related with physical wealth that materializes for Americans in the form of skills, a strong manufacturing industry, and robust supply chains. Michael Burry (Big Short guy) notes that the amount of money stored in indexes and funds tracking the S&P 500 are many orders of magnitude larger than the money that actually moves around between the shares of the S&P 500 companies themselves.
- anamax 5y ago
  > Part of the problem is that most 401Ks have a very limited set of investment options. Once you're retired, you can roll your 401K into a self-directed IRA which you can invest with not many restrictions. For example, you can put all your money into hospital stocks.

whimsicalism 5y ago

One big issue I have with the market - and not one that I really know how to address, is that it seems like it has provided an easy mechanism to launder wealth intergenerationally that was acquired through incredibly unjust means. Just as a single example, many of the descendants of the merchants who made their wealth off of even something as far back as the Middle Passage [0] or supporting slavery in the US are often in elevated status today (both politically and with wealth). Wealth diffuses with time and transactions, but still - it spreads outwards from social proximity. [0]: https://en.wikipedia.org/wiki/Middle_Passage https://en.wikipedia.org/wiki/Middle_Passage

Kranar 5y ago
How was the stock market involved in this laundering? At any rate, today's markets are quite rigorously monitored so that the provenance of any single share is reasonably well established.
- whimsicalism 5y ago
  First - the "market" is not just for equity, there are markets in plenty of things. > today's markets are quite rigorously monitored Wealth acquired by slavery (or descendents of feudal nobility) can absolutely be used to purchase a stock. Unclear what you mean by the provenance of the share - I am talking about unethically acquired money used to buy ownership which is then "laundered" through ownership stakes in legitimate companies.

vineyardmike 5y ago

> it feels infuriating that in order to afford medicine, clothes, food, shelter, and defense once you're past your working prime you must attach your fortunes to companies that have very little to do with the actual services you require in retirement. This seems like an incredibly weak argument for an incredibly good point. Its crazy that you must attach your fortune to companies that have very little to do with you in general. A wealth manager, or annuity or other similar service (pension) seem like a very reasonable (conceptually) place to attach your wealth - their job is to provide for your retirement. Saying "buy stock market indexes and government debt" seems like a very indirect way to hedge your retirement.