The Stock Market and Las Vegas

I'm sure it's clear to many people that the stock market is simply a gambling establishment, appealing to the very same people that go to casinos. For some reason, this didn't occur to me until late in my life.

The value of a stock, as it is bought, sold and exchanged on Wall Street, has little or nothing to do with the value of the company on whose name it is based. When originally sold by the company owners, it was a way of raising money to improve the market share of the company, and the stock purchasers were thereby to receive a share of the future profits.

But as soon as the stock was sold, not by the orignating company, but by the most recent purchaser of the stock, its new value was now based entirely on the expectations and perceptions of the new purchaser. The purchaser was simply gambling that the value of the stock would change in a predictable way, so that it could be resold for a profit, not on the originating company's products, but simply on the expectation of exploitable change in price. Stocks go up and down in the amrket on a hourly (or shorter) basis; this clearly has no base in change in the company product value. People develop systems to predict stock prices, and they make public predictions, both of which change the expectations of potential stock purchasers and thereby the "value" of the stock.

It's a "get-rich-quick" scheme, and the suckers are those who think they can predict it. When the majority of potential purchasers believe the market is in a cycle of positive change, the price goes up, thereby proving the prediction. When the majority of potential purchasers think the market is going to go down, they act on their predictions, and lo and behold, the price goes down. The value of the company which issued the stock probably hasn't changed, but the stock value has.

I don't mind people gambling, in Las Vegas or in New York. I object to the pretentiouness, the pretense that "business" is going on there, that stock purchasers are contributing to the economy. Of course they are not. Making money on the stock market is a form of vampiristic feeding on the blood of those who actually produce goods or services of value. It's just gambling. There's nothing scientific or productive about it. It represents, as all gambling does, the hope of making money without having to work for it or produce something of value.

Perhaps it keeps the non-productive part of the populace happy and content with their hopes. I think they should just get a job.