Hacker News Reader

Comment by Iv | Hacker News Reader

The economy is not a zero-sum game and that's something I wish more people understood. Real GDP per capita grows. The average US citizen has access to more intrinsic values that aristocrats had just a few centuries ago.

However, he may be talking about pure trading, a.k.a speculation, which is very close to a zero-sum game. If you are not in for the dividends, yes, that's close to a casino where the banks who charge for transactions are the inevitable winners.

I wish we followed Warren Buffet's advice and forbid to sell a stock less than 6 month after buying it. I also don't see any interest in making the stock prices change every nano second. A quote a day can be enough if you are an investor, not a speculator.

View on HN

> I also don't see any interest in making the stock prices change every nano second. A quote a day can be enough if you are an investor, not a speculator.

Well, there isn't any interest in it per se, but that is intrinsic to how fast we can make trades... Somebody offers the lowest sell price and somebody offers the highest buy price. The "value" constantly changes as those two highs and lows fluctuate based on who decides they'll sell for lower than the lowest offer or who decides they will buy for higher than the highest bid.

Unless you're saying that those offers/bids should only be accepted once/day and can't be changed until the next day? That's the only way I could forsee changing the quote once/day.

Even if you only update the order book once a day, you still need some way to decide which of 2 orders at the same price gets in front of the other, so people still have to compete on time, except now the prices are worse in both directions because market makers have to be able to commit to the price for the entire next day.

My proposal is to randomize the order at which orders arrive. Market makers are largely algorithms by now anyway.

Send orders all day, clear them once a day. Calculate the resulting quote.

Let go of the illusion that the real value of companies change every nano second. The fact that stock exchanges close at night and that for 12 hours, values don't change proves that it is not a necessity.

Having 12 hours instead than a few seconds to think about the impact of a given news on the stock market is going to give room to breath for actual investors.

Trading is necessary for liquidity. The real problem is that uneducated people think trading and investing in the stock market are the same thing.

> Real GDP per capita grows.

Do you know if the share of real GDP for the bottom 10% (or in general, bottom x%) of consumers grown? And is there a well-known term/metric for this?

Increasing inequality is a problem I consider very important for the progress of mankind, but I just want to point out that in this discussion on this specific topic, the share of GDP is not what is important. The absolute number (in PPP) is what we want to look at.

The Gini coefficient will give you a measure for the statistical spread of GDP per capita and is used to measure inequality. [1] Taking the time series of the Gini coefficient and the GDP will show the growth for a percentile of interest.

[1] https://en.wikipedia.org/wiki/Gini_coefficient

I guess I'm searching for a graph that has time on the x-axis and (real gdp * % of income that went to the bottom z%) on the y-axis for 5 ~ 10 different values of z. And hopefully it trends upwards for all values. I'm just surprised this isn't something that economists have already thought of as it feels like it would be the most important GDP-derived metric. Or at least "GDP per capita on median" if that makes sense.

Reply on news.ycombinator.com