Uncle Charley Versus The Stock Market

I was standing in the shade of a sycamore tree near where Charley was repairing his fence. My job was limited to handing him tools, which was fine with me. It was hot, even hotter than usual for an Oklahoma summer, and there was almost no wind at all, which was certainly not usual for an Oklahoma anything.

"You read the paper this morning?" Charley asked, looking up from his work.

"Sure. What got your attention?"

"Been readin' about the stock market goin' up and down. Why does it do that, you think? Them companies don't change their value that much, but the stocks with their name on them sure go up and down like an elevator."

"No mystery to it, Charley," I said. "Stock prices go up when the buyers think they're going up, and stock prices drop when the buyers think they're going to drop."

"So accordin' to you them prices are all based on guess-work?"

"Yes, that's about how I see it."

"Well," Charley said, "that makes it just a form of gamblin', like Las Vegas with branch offices everywhere. Hold that post straight for me."

"I suppose that's true. When a new company starts up and needs money to get started, they can sell stock. The company gets to use the money, and the stockholders get to share in the profits, if there are any, and if he company fails, they lose their money. So that's a gamble, I guess, but it gives a company a chance, and without that, lots of good things wouldn't make it to the market."

Charley looked puzzled. "But after that, people just sell the stock back and forth to each other. That don't do anything for the startup company. That's just speculation."

"You got it," I said.

"All them people, actin' like they're doing something important, doing real business, they ain't doing anything but gamblin'. They don't make anything or produce anything themselves. They just want to bet on whether company stocks will go up or down. What do we need them for, anyway?"

"I don't think we do need them. They don't benefit anybody but each other, as far as I can see. Now, the start-up investors are doing something useful, because they give money to the company to help it succeed, and in return they hope for the company to succeed and pay them a share of the profits. But all the ones on Wall Street, the speculators, they're basically just parasites trying to make money without having a product or service."

"Tell you what, Harry," Charley said. "If I was Emperor I'd just shut 'em down. It's just gamblin' and pretending it's a serious business."

"Then they'd have to get jobs where they actually did something. Most of them don't know anything except gambling."

"Let 'em do it in Vegas and stop pretending that all them stock prices and the stock market are of any importance at all."

"OK with me," I laughed. "I figured out a long time ago that the only reliable way to make money is to work for it."

"Now that's a real unpopular idea, and I don't think it will ever catch on."

"It hasn't so far, that's for sure", I answered.