The thing about the stock market that bothers me.

Time was when people put their money in the stock market to invest in a company to earn money via dividends and for companies to get money for expansion and growth.
That's gone.
Now it's become realistically legalized gambling. Computers buying and then selling a stock automatically within minutes based upon stock movement rather than actual production changes for example. Long term investing seems so out of date. I know, I know, there are still some long term investors but it just seems they are the exception and not the movers.
Take now. Frequent talk about recession at a time when companies are hiring because they are growing and unemployment is lower than some say is possible let alone healthy. Inflation exists for the simple reason that production is outstripped by demand.

Why do I just get this nagging feeling that the filthy rich who have the power to manipulate are just messing with our minds so they can buy more for less from the little guys looking for retirement incomes.

 

You nailed it stillblue, with the corrupt worthless career politicians in charge right now, (on both sides) the little guy will never be allowed to get ahead again.

The corrupt worthless career politicians are aligned with big tech, and they have cash pouring in to their campaign funds.

They don't need to keep the taxpaing citizens happy anymore.

I love my country and I'm constantly being shamed, ridiculed, and screamed at that I am unamerican or whatever for trying to defend the Constitution that was put in place to keep our country great.

The problem is the POLITICIANS who have aligned with big tech and the filthy rich who are no longer content with being stupid rich. They now want GOD like power.

Good luck fighting that when we are so divided.

They have us right where they want us.

 

yep, you're gambling the rich will buy or sell, they decide the market

 

I hear ya. I feel that computers should be removed from stock selection. Stock picking should be done by PEOPLE, not machines.

 

Yup. I think its called 'microtrading' and its mostly done automatically with computer algoythms. He who has the best algorythm gets the most money.

I stay far away from the stock market. I see it as a big casino, the microtraders are basically 'the house' and they always win.

 

My advice is to take Buffett's advice. Think about a long term, buy and hold strategy. One that can be enhanced by going to cash or reducing equity exposure when a sea change cycle like rapidly rising interest rates occurs, the one we are in now. One that was telegraphed a year ago. Clearly there is more computerized, algorithm driven volatility these days, which I agree should be banned. And one must be nimble as biz trends change more rapidly than before.

Shares in Warren's company, Berkshire Hathaway, are available to be purchased, allowing you to benefit from his genius and avoiding having to make buy/sell decisions for yourself. Though I would caution that both he and his long time partner, Charlie Munger, will be retiring/dying soon. Their steady, value oriented approach has served them well over time. They will ensure their investment style will continue when they are gone.

One more word of caution. Globally, government debt will increasingly become problematic. The higher the debt the higher the return on investment purchasers of debt will demand to compensate them for the risk they assume. Meaning interest rates, regardless of economic cycles, will drift higher (making doing business more expensive and thus slowing growth)......in turn adding to the debt. At some point in the future reducing stock/bond exposure and shifting to precious metals will become imperative.

 

Also keep in mind that some of the inflation is artificial. Companies raising prices not because they need to, but because they can under the cover of the inflation. If you're a company who wants to make more money but are worried that price increases will hurt your image and your customer base, right now is a great time to raise your prices because you're just one of many other companies doing the same.

 

I think the fly in the ointment there is most companies don't operate in a competitive vacuum. So there is a built in incentive to be efficient and keep costs low so that low prices can be passed on to customers. For the most part, there are exceptions, higher prices being charged are reflective of higher input costs. The very cycle the Fed is trying to break, slowing end demand by raising interest rates.

 

There is NO way to stop insider trading. Politicians with half a brain know what bills will increase/decrease which stocks. Shorter (way shorter) term limits would be one way to help stop this BS

 

Amen then there is Citizens United and the corporate lobby eliminating and "propaganda bending' the will of the people.

 

The speed of computers automatically buying and selling means that new information becomes built into the price of stocks almost immediately. The result is that day trading is almost impossible for the average person, if they want to make a profit, because stock price almost always reflects actual market price. There are no bargains to be had, or overpriced stock to get rid of.

Overall, this may be a good thing for the average investor, because they are much better served by buying an holding index funds that return the overall gain of the market. In aggregate, the stock market will still go up, because of the underlying profitability increase of the sum of all companies in the index.

 

Bingo. I always found it funny people complaining about the very people they voted in.

 

The "filthy rich" depend on the economic power of everyone else. IF Amazon's customers can't afford to spend money- Amazon loses. True of every business, large and small. A thriving economy benefits everyone, rich or poor. It generally does that in proportion the the degree people work smart and work hard, and that is also beneficial to everyone. Rewarding performance encourages and teaches people to perform. Rewarding apathy and dependence teaches nothing of value- as does rewarding the people who have been told they are entitled to reward without earning or performance.

Companies are hiring now- because they are desperate. People quickly adjusted to the idea you could "work" from home- and while some worked, a great many coasted. As that has ended, the coasters resent the idea that they not only have to show up- but they need to perform. The opportunity for advancement today is great, because the decay in work ethics and attitude is so extensive. No company succeeds by hiring such people, and their share of the population has grown dramatically. It takes no effort to settle to the bottom of the pool. It takes performance to stay on top.

The stock market- is only gambling if you want to gamble. IF it were gambling, you would not have a majority of winners, you would have a majority of losers. History shows investing is a path to wealth. It does not say stupid or foolish people will get rich that way. Every business in as investment by it's owners. They insure success with a good plan, careful analysis and consideration of risks and potentials, and good execution of the plan. If you invest in the market, you should do the same thing. That is not gambling. It does have risks, but calculated ones. Combined with that knowledge, nerves and strategy insure your success. OR- you can throw a dart at the list of stocks or follow a hot tip to make your choice- and that is gambling. Comes back to basics that apply to most everything in life. Kenny Rodgers sang it for ya...

You have to know when to hold them- know when to fold them. Know when to walk away; Know when to run.

 

You can always choose not to play. A couple of things. Equities are still pieces of ownership. Whether your investment offers dividends is a choice you make and either they do, or the company does not pay out. In those cases, where companies don't have a dividend, your only value buying into those companies is future growth and value increase based on it. Which is a lot like gambling. So, if you choose not to want to invest in those growth stocks, don't.

But don't conflate the dynamics of the stock markets with the actual dynamics of the economy. Inflation is simply a result of the overspending and the massive amount of cash the US government pushed out. Had government simply not interfered, the normal transactions of the economy would have continued. But because government chose to intervene, and shut massive parts of the economy down, and then tried to compensate by pushing debt fueled money into the economy, several things happened. Consumption without production. And because production lagged, and became scarce, artificial inflation started. Blame Joe. Since he's been in office, inflation has more than quadrupled. As has the pace or velocity of his cash infusion. Artificial restrictions then on production and reckless cash infusion is always a recipe for economic disaster. We know this. history demonstrates this time and again.

So, you choose to ignore the fact that is was government that created the condition, and now blame rich people? Why? Rich folks have just as much at stake in the market stability as everyone else does.In fact, they have vastly more at stake than most folks do.

Did this stop you from participating in your 401K? I doubt it. The volume and the velocity of investment dollars flooding into the market isn't stopping. All that demand has to go somewhere. What I find inexcusable from this administration however, is that they know their policy is simply burning investors wealth. Perhaps you should look there to address your anger.

 

It has always been legalized gambling.

 

Funny how those who label the stock market gambling usually have no problem with the proliferation of lotteries and real gambling schemes all over the country.
If stock investing is gambling, then every business owner is just gambling.

True gambling is based on consistent odds that insure profit for the house, and loss for the gamblers overall. There is little the players can do to shift those odds, even in small degrees.
They play, despite most knowing the odds are against them. An investor who does so will soon have nothing to invest.

On the other hand, the stock market's average odds benefit the investors, and the greater your understanding of the process, the greater your skills, the greater your level of success.
Stock market is a kind of gamble for those who lack that- but that's the result of the individuals skill, not the market.

 

The rich own the media and dictate what is reported and how it is reported.

 

The rich have always owned the media, but profits determine what is reported and how it is reported. Each outlet has their target audience that their product is tailored to.

 

I don't have a problem with the stock market being a form of gambling, and I don't have a problem with other forms of gambling either. Personally I invest in the stock market, but do not typically engage in other forms of gambling.

They ARE. Its the nature of the beast. They take a risk aka gamble and hope they win,

Sure, the odds are far better than in a casino where people spin wheels and hope to hit the jack-pot. I'm glad you mention 'odds', because its a gambling lingo.

Odds = the ratio between the amounts staked by the parties to a bet, based on the expected probability either way.

Even the best of the best can lose money, especially in short-sale transactions.

 

In spite of its negatives, the stock market is still the best place to put your money with the possible exception of gold or silver. My objection to gold and silver is that they do not aid in the economy. My money going to a corporation helps that corporation keep going. Gold and silver are just pure speculation.

My money is invested in what I believe is best in the long run. I just let it ride. Right now, the stock market is hitting us with a double whammy. Not only is the stock market down, it is subject to the same inflation as the rest of our money. I am not sure about my investments at this time, but with inflation, my investments were down close to 20%.

Because I am over 71, I am subject to automatic minimum distribution for much of my investments. I roll that stock over into my after taxes investments. Because the stock market was up at the beginning of the year, it is taking out a lot more than I would prefer. I got hit with a very high income tax rate in 2021

 

And NEVER doubt for a moment that the puppet-master behind 'the Big Casino' is the Federal Reserve System! With their crushed-interest, 'free-money' Quantitative Easings (I, II, III), "Operation Twist", and all the other little magic tricks since the Fed totally subverted everything of importance in our economy in 2007, they have put all their effort into protecting and promoting stock markets!

Fed officials play the stock market, too, and that's a "flashing red light" conflict-of-interest that is as obvious as any manipulation can be:

https://www.nytimes.com/2021/09/09/business/economy/fed-stock-trading.html
https://money.usnews.com/investing/...les/how-fed-decisions-impact-the-stock-market

Oh, supposedly, NOW, just since 2021 there's new protocols that forbid Federal Reserve employees from buying and selling individual stocks... right? And there aren't about a hundred ways that they can get around something like THAT...?

. "Hey, nothin' says a 'buddy' can't buy stock... right?"










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That's crazy. Nonsense.

First, while people are put their money in stocks they're also putting their money in partnerships, sole proprietorships, privately held corporations --let's face it, there are a LOT of ways of doing business.

Second, most profits that people have made over the centuries of buying & selling stocks has been not from dividends but from the changes in the value of the company itself. Profits from increased stock equity far outweigh dividends. It's been that way for centuries.

Third, the vast majority of those that gamble do so in casinos, on line or in person (from here). Total gross revenue U.S. casinos in 2020 was not quite $30B. That same year the total market cap for U.S. publicly traded companies was $40,737B.

Sure, there are some folks that get addicted to gambling by buying stocks, but if they're ruled by greed & fear then they lose all their money and quit. Meanwhile most Americans invest in stocks --either directly w/ brokerage accounts or indirectly though pensions and insurance accounts. Returns for U.S. stocks for centuries has been about 10%, way above the one or two percent for bonds or savings accounts.

 

As a banking cartel they are also invested in protecting banks and banks make money out of interest rates. The parties involved in the Fed (the owners of financial institutions), will make money either way, which is why they exist.

 

Of course even the best can lose money. You can mis-step and fall down the stairs you've previously used a thousand times too, but I doubt most would call that the result of a gamble.If it is- most likely a gamble on your agility and skill, not the stairs.

I'm pointing out the difference between the expectation of success from pure chance or luck, as opposed to the expectation of success from good planning and execution. The former is gambling; the latter is how life works. There are odds on how long you will live after today, the possibility of your home burning down, your car being stolen. Insurance companies know those odds precisely, and their entire industry depends on them. This is using the odds to insure success. Luck or chance has little to do with that in the long run. I don't know about you- but I invest with the same kind of mindset.

Some people don't understand how to build wealth in the market- and they shouldn't expect to without that. Others just aren't wired for the emotional control needed. My brother is one of those, so he gave control of his stock to me and his son. I'm a good investor- but a poor gambler. I don't play against the odds!