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Well, they're (usually) about taking over someone else's investment. In theory, each share should be priced at the present value of future dividends, all the w
by kd5bjo 12y ago
Well, they're (usually) about taking over someone else's investment. In theory, each share should be priced at the present value of future dividends, all the way forward to the company's eventual liquidation -- if market price is below your estimate of this, you should be buying; if above, you should be selling.
- kasey_junk 12y agoRight, but what you are now talking about risk and liquidity. Most market transactions have nothing to do with investment in companies, they have to do with pricing risk. That it makes it easier for companies to find investments in some cases is a beneficial impact of this, not it's main focus. It is a particularly HN bias to think of the market as a place to go fund a company, but that is largely a by product for most people. For most people (including everyone with an index fund/etf) its a place for managing risk. That doesn't even take into account, that a big component of this story was about S&P futures. Which are all about risk. So it is uninteresting (even if it were true, which i doubt) that microsecond time scales make the markets less about investing in companies, they already aren't about that.
- deleted 12y ago[deleted]