This stock market smells bad.

The stock market has ALWAYS been speculation. People still buy stocks for all the same reasons they ever have.

as a director of a company, in need of extra capital to expand, I would view speculators in my shares as fair weather friends...

I wouldn't want them for obvious reasons.

just say that stocks are serious...

not play things for people with an eye for a quick buck or the habit of gambling...

what say I wanted to get that fickle element out of the mechanisms that produce the goods and services that we all need to live...

what do you think would be the knock on effects of introducing laws to prevent speculation on the stock market?

No more stock market.

work it through Adrian...

it's not as obvious as you think.

I never said banning the buying and selling stocks...I just said banning speculation.

(hint, define speculation).

The stock market is 100 percent speculation - that the value will increase over time. When people get involved with daily trades, they lose big time, because it's impossible to time when the market will go up or down. Over 80 percent of day traders have gone broke, and the rest of the 20 percent have not done any better than the 500 index funds - usually worse, because it costs them fees to trade every day.

and what about dividends...

consider how they might play a part in a new type of stock market...

True, the market value has changed some with the new capital gains tax reduction. Good point!

The stock market is a certain way...technology is so fast now...you see stock trends that are reactions to reactions...then more reactions to those reactions...sometimes there is no real event at the heart of those wobbles.

My main criticism of the way money and stocks work, is the widening gap between the physical world...and it's representation in numbers.

It's one thing to have people paying outlandish prices fro luxury items..(what else are the mega rich going to spend their money on)...

but when irrational speculation creeps in on essential items. houses...food ...that sort of thing...it seems to me that the whole point of money has been twisted to a point of dysfunction.

oh well I was close...

The History

Wall Street can trace its name back to 1653. Originally it was set up for defense and not for commerce. Settlers of Dutch descent, who were always on the lookout from attacks by Native Americans and the British built a 12 foot stockade fence. Little did they know that this fence would go on to become the center of financial activity in the world. The wall lasted a good while, until 1685. At that point the wall was torn down and a new street was built. The British called it Wall Street.

oh now this explains it all ...

http://www.londonstockexchange.com/about/about_05.asp

ok..looks like this is the beginning...
what happened!!!!


1750,
Merchants and brokers gathered in Manhattan to auction off a wide variety of commodities. They traded wheat, tobacco, cotton, sugar, and slaves
Selling of shares was not common in those days .

Commodity trades is big business; another form of speculation about future prices.

Hmm you are right…

The beginning of the stock market explains a lot of things …

Conceived to get round the law of the time (making it illegal to publicly auction goods of the commodity variety)…

By a small group of astute/greedy merchants working from a few coffee shops.

And how it all was a reflection of the London stock market…a place to bring goods and services together for exchange.

So from what I can tell the origins of the stock market were once practical.. you could imagine they were something like the vegetable or fish or flower markets of today.

Get up early.. get yourself a deal…go and sell it later.

The whole process it seems, was intercepted at several points by those not directly concerned, in order to make money without doing anything for it.

Easy when there is a few of you at it…not easy when everyone is at it.

Case solved.

Anybody want to buy a bbl of oil at $43?

I don't see how banning speculation would do anything but bring down the stock market forever. Don't forget that buying stock is not investing in a company (only in the rare case you buy from the company, which is a small part of the market). It's just a game.

The bubble from tech stocks has happened before (even in the 1600's) and will happen again. To answer your question about how to limit speculation, I'd say ban program trades. Strange and irratinoal things happen when a lot of programs go off at once. Also, i believe it was one of the last weeks in June (this year) when over 70% of the trades on the NYSE were program trades. Has the market gotten so irrational that we don't even need to watch it to mess with it?

Re: This stock market smells bad.

There have always been markets were live stock was sold, and some of them still do. The most prominent examples include the Chicago Mercantile Exchange and the New York Mercantile Exchange. But these aren't called stock markets anymore; the "stock" in "stock market" is now understood to mean "supply of capital".


When Moses speculated that there would be seven fat years, followed by seven meager years, and hoarded grain during the fat years in order to sell it at high prices during the meager years. Or eariler -- Moses is just the first documented case I know of.

thock, I thought that was Joseph interpreting the pharoah's dream.

oops, letty -- you're right. Thanks for the correction!