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Honestly what would happen if the stock market didn't exist. It seems like these days the price of stock is so disconnected from lived reality that genuinely co
by wholinator2 7mo ago
Honestly what would happen if the stock market didn't exist. It seems like these days the price of stock is so disconnected from lived reality that genuinely confused if it would be all that catastrophic
- stogot 7mo agoI hypothesize all dividends, no share value. How would that world look
- fsckboy 7mo agothat makes no sense. companies need capital, that's why there is a stock market. dividends are paid from past earnings, never capital (earnings are only a %age of the value of the capital) and not from higher expectations of the future.
- cluckindan 7mo agoIn a perfect world… reality is different, however. Plenty of companies take on debt to pay dividends, e.g. just before going public.
- fsckboy 7mo agogrowing companies generally have capital needs that exceed retained earnings, so paying dividends would by definition increase capital need.
- deleted 7mo ago[deleted]
- nightski 7mo agoWell we’d go back to an era where private capital owns the world. The public would not be able to participate or benefit from the ownership of companies and share in the prosperity.
- idiotsecant 7mo agoYes, hard to imagine this crazy timeline where private capital rules the world. Totally inconceivable.
- vasco 7mo ago"It's not good so let's make it worse"
- cluckindan 7mo agoCryptocurrencies everywhere.
- bmitc 7mo agoPrivate capital doesn't own the U.S.?
- michaelsshaw 7mo agoBREAKING: Countries other than "U.S." found to be members of so-called "world" Although I'm not sure what he's on either. Capitalists definitely own and exploit pretty much the entire world, with few exceptions.
- nightski 7mo agoI should of used the term "equity" instead of "capital". I meant that the worlds largest companies would no longer be able to be owned by public equity and would only be available to those in the exclusive club of private equity.
- AngryData 7mo agoI mean the average person already barely has any participation at all, and certainly doesn't benefit from it when their money gets dumped down the toilet because of some widespread financial scams and grifts that repeatedly happen over and over again.
- bluecalm 7mo agoIt's not disconnected from reality. You just don't understand it. If the stock market didn't exist you would have less opportunities to invest in well priced companies and people would be manipulated in investing in opaque, often ridden with accounting shenanigans things like private equity. The more companies are public and subject to price discovery done by sophisticated players the better it is for uninformed players like normal investors but also less sophisticated informed players like pension funds.
- bmitc 7mo ago> people would be manipulated in investing in opaque, often ridden with accounting shenanigans things This happens even with the stock market. See every financial crisis.
- bluecalm 7mo agoLike which one? 2008 crisis was caused by reckless lending by banks as a result of silly regulation (government guaranteeing loans), implicit promise of bailouts and you could argue corruption. What does it have to do with the stock market? It's a nice dismissing soundbite but you're just missing the broader point and real issues coming with people's money being invested in non public entities. Besides, just because some problems also happen with solution A doesn't mean they wouldn't be worse with solution B. You are not really making a point just dismissing the idea of a public market without understanding the value of it.