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Just think of all the GDP that's tied up in investment banking. We'd probably all be better off without a stock market. Imagine if those people had to actually

by bluthru 13y ago

Just think of all the GDP that's tied up in investment banking. We'd probably all be better off without a stock market. Imagine if those people had to actually introduce wealth into the economy for a living instead of just pocketing percentages.

patio11 13y ago
We'd probably all be better off without a stock market. Would you care to describe the mechanism by which middlemen get less of the economy without a public market? Because that is not the experience of assets without public markets. (And, indeed, this is why investment banks make most of their money away from "the stock market.") To use an example which many HNers are intimately familiar with, if you happen to have $100,000 to invest towards your retirement and decide to park it in an index fund, you will pay approximately $150~$500 a year for the privilege. If you were to invest it via a venture capitalist (who specialize in making markets between people who have money and people who have companies in the absence of public markets which can connect them), it would cost you $2,000 a year and 20% of your investment gains... in the unlikely event that your VC of choice had positive returns. Also, you wouldn't be allowed to invest in the first place, because the VC model does not include talking to poor people like yourself.
- bluthru 13y ago
  It's a system that depends on the next generation buying into the idea of what a company is worth at a higher value. What happens when the next generation has no interest in buying into the idea of what a share of a company is worth? What happens to the last generation that has no one to sell shares to? Why does retirement depend on the young effectively giving the elderly money with wall street taking a percentage? We used to have pensions in this country before the 401k loophole was exploited. 401k was never intended to be a middle class retirement vehicle. Instead of just pocketing the matched 401k funds, it is required to go to wall street where they take a percentage. Built in customers, even though 75% of managed funds perform worse than index funds. It's a joke.
  - robryan 13y ago
    A company might be worth more down the track, because it has created more value? If it hasn't it is unlikely to be worth more.

by bluthru 13y ago

patio11 13y ago

We'd probably all be better off without a stock market. Would you care to describe the mechanism by which middlemen get less of the economy without a public market? Because that is not the experience of assets without public markets. (And, indeed, this is why investment banks make most of their money away from "the stock market.") To use an example which many HNers are intimately familiar with, if you happen to have $100,000 to invest towards your retirement and decide to park it in an index fund, you will pay approximately $150~$500 a year for the privilege. If you were to invest it via a venture capitalist (who specialize in making markets between people who have money and people who have companies in the absence of public markets which can connect them), it would cost you $2,000 a year and 20% of your investment gains... in the unlikely event that your VC of choice had positive returns. Also, you wouldn't be allowed to invest in the first place, because the VC model does not include talking to poor people like yourself.

bluthru 13y ago
It's a system that depends on the next generation buying into the idea of what a company is worth at a higher value. What happens when the next generation has no interest in buying into the idea of what a share of a company is worth? What happens to the last generation that has no one to sell shares to? Why does retirement depend on the young effectively giving the elderly money with wall street taking a percentage? We used to have pensions in this country before the 401k loophole was exploited. 401k was never intended to be a middle class retirement vehicle. Instead of just pocketing the matched 401k funds, it is required to go to wall street where they take a percentage. Built in customers, even though 75% of managed funds perform worse than index funds. It's a joke.
- robryan 13y ago
  A company might be worth more down the track, because it has created more value? If it hasn't it is unlikely to be worth more.