The stock market is a machine for creating cults
interconnected.org
interconnected.org
As in real life, if you own one millionth of something, your voice will mean nothing.
But big shareholders have power. At any time they can summon an extraordinary meeting to revoke the directors or even force the company to go in a certain direction. They also decide if they will give/let income/capital funds in the company for investment or to take it all. Reducing the company capacity to expand.
As a small shareholder, you can group with other small shareholders to form a group with a critical mass of voting power.
Also, if small shareholders don't believe in the company and sell, the price of the share will go down, that will impact the valuation for big one also, that could use their power for change is the situation goes too bad
Thanks for elaborating on why shareholder value is bad for all but "big shareholders"!
A small shareholder certainly can't command power over a larger shareholder, but their interests tend to align in most cases.
Maybe centrally planned economies could be made to work?
Maybe currency and investment could be directly controlled?
What fraction of the population would be allowed to starve and die?
My take is that central planning's problem wasn't one of where the planning took place, it was one of data quality (freshness, accuracy), inadequate data, and problems in the agenda for using it. Integrated macro- and micro-planning will still suffer from the central-agenda issue, depending on the motivations and means of the planners. But coordination up and down, for purposes that are not exclusively for the generation of cash, seems worth exploring.
Discussion today in one paper about prescribed burns in Yosemite held up due to air quality laws, but no mention of jailing Mother Nature for the air quality violations of a major forest fire. I suspect the long-term sustainable carrying capacity of the Earth for humans is rather less than the number outstanding today, but starve and die seems worse than options we could engineer if we wanted to. Fight in battles and die will be a lot of them too if things swung the wrong way.
We need economies that allow nations to distrust each other, and in the USA at least allow every individual to distrust every other. Socialism seems to work best for those who buy into a social contract and the USA is losing those people left and right, egged on from within and its adversaries.
But social market economies do work right now.
That's the only version of "communism" I can see as a steelman.
Communism as a centrally planned economy can not work until central planning system will be as smart and knowledgeable about peoples needs as the people themselves.
OP seems to be partway through some scales-falling-from-eyes event.
Voting machines are susceptible to cults. Weighing machines less so.
At the end of the day, stocks exist to return dividends to their shareholders. Those that don't will eventually become worthless, no matter how fervent the cult around them.
Given that what Graham said does not falsify what the author of this piece claims.
Sure maybe the cults would rotate, so today is all about Tesla and Gamestop tomorrow will all be about cryonics and life extension companies, but there will always be a certain % of cults in the stock market, and they'd dominate the conversation because of the meteoric rise in the price of the stock, that would compel people to think about how their lives would have changed had they thrown their money at it in the early days.
One has to wonder are there some fund managers there who actually are affected by the meme stocks. Or follow those as investment reasons. Which feels kinda worrying in bigger scheme of things...
Saves wasting 20% of the labour force and gigawatts of electricity on hfc and other fintech too.
Capital (ie. the control over the physical commodities of the world including accumulated past labour whether assigned by markets, by political power, or by favour of those higher in a heirarchy) is agglomerative, and systems that don't redistribute it are pathologically broken. If your system assigns power and privilege to power, then you wind up with mentally ill power-seekers in control of everything. It should then be hardly surprising that they abuse the people under them and oppress and kill in order to get even more power.
The "meritocracy trap" is well-known (see for example Michael Sandel's critique of same), but it says more about what changes are needed to get to a more truly meritocratic state, than it does about what meritocracy fundamentally is.
Subsidiarily, the critique of meritocracy says less about how good or bad meritocracy is, and more about how the real world we live in is not meritocratic at all.
The danger is not "meritocracy" itself, the danger is fooling yourself into thinking that you got where you are because of merit rather than a lot of luck.
But that doesn't mean that chasing perpetual short-term returns is the best way to grow an economy.
The first sentence of the article says it all.
Different companies really can have some particular layer of superstitious groupthink depending on how deeply they are affected by this.
For example, imagine a corporation that specializes in Ponzi schemes and other methods of systematic defrauding of its customers. By becoming a shareholder in that corporation, one can profit from that criminal activity, and if any prosecution ever takes place, it will only be the employees and executives of the corporation who go to jail, not the shareholders. This is really what investment capitalism is all about: ownership without responsibility.
This is of course a simplified picture as shares are only one of a variety of securities, and understanding what securities are is the first step in financial education:
> "Securities appear in different forms such as bonds, stocks, bank notes, futures, options, forwards, swaps, etc. Depending on the distinguished characteristics that each of these securities holds, they are categorized into different types such as debt securities and equity securities. The securities that are used for the purpose of obtaining credit such as bank notes, debentures, bonds are known as debt securities. The securities that are being transacted as a result of the investors’ interest towards the assets of firms are known as equity securities such as stocks and shares. Further, the derivatives including options, futures and forwards formulate an agreement between two parties to buy or sell assets in the future date at a pre-agreed price."
https://www.differencebetween.com/difference-between-shares-...
This statement has so many issues.
1. According to wikipedia it was awarded to trade guilds and monasteries in the 15th century, way before the advent of corporations
2. it's a stretch to say a particular nefarious use of something (in this case limited liability to avoid criminal liability) is the "origin" of something. There are non-nefarious uses of limited liability, eg. in the case of a bad investment. Saying otherwise it's like saying "the origin of a defense lawyer is to allow criminals to avoid punishment".
3. being in a corporation doesn't magically make you immune to prosecution. You can't form a hitman LLC to murder people with impunity. Being in a corporation does make it harder to assign blame, and it's easier to prosecute corporations than people (they don't have 5th amendment rights for instance), which is the reason why you see cases of the corporation paying a fine or whatever but the directors getting off scot free.