If there was no trading, how the heck would anyone know what the correct price for any asset was??? It's through the joint efforts of all the traders that all the information is incorporated into prices. That makes sure that any profits are arbitraged away asap, so when your butt decides to add to that IRA account, you have a pretty good guarantee the prices you'll be getting are close to right. I can give you a better example. Close your eyes for a second and imagine you are in Russia and you want to buy some stock, or bonds, or anything... I can assure you that the price you'll get will be VERY different from the real intrinsic value... Can you guess why??? It's only through constant trading that markets can become as efficient as they are here in the states. So all of you guys who think you don't contribute anything to the well-being of society b/c you are merely trading and not actually producing anything etc - you can sleep peacefully now You actually are contributing b/c trading insures that the prices remain close to where they should be. Unless of course you are simply "noise traders" In which case you are lucky to still be afloat.
I am starting to hear some music in my head. Sounds like Freddy Mercury: A sort of "thump, thump, thump another thread bites the dust" Well, at least it didn't degenerate quite as severely as "superstition, luck and Voodo". But in another hundred pages, it probably would have. We daytraders are obviously the cornerstone of society. Why argue? Good luck and good trading to all. And a fond farewell to this thread unless anyone is truly interested in anything specific to trading and the simplification of such. I will check back and see if anyone has anything to say or ask that is relevant. Otherwise, Peace! RS7
Free enterprise, the research that it motivates and finances, the wealth that it generates, the good that it enables, is dependent on live markets, which facilitate efficient pricing, acquisitiion and disposal of assets. Some market participants are traders. The Invisible hand doesn't need anyone's permission to utilize his efforts. Restrain traders, or any other component of free markets, and modern society, from a material standpoint, collapses proportionally. The world is full of examples. It's really sickening to me that on a 'traders' message board, this is such a foreign idea. This is so fundamental to liberty that it's arguably synonymous. So on the next thread about the virtues of higher 'education,' why don't we discuss why people don't seem to know or care about this fundamental condition of freedom?
Chas, you frequently refer to "the invisible hand". I am curious what this means. And I agree, freedom of any kind should, (in general), not be restrained. However, I am not quite sure where this is coming from. Who is restraining whom? If you are talking about pattern day trader rules, or something like that, well there have always been some kinds of constraints. You can't short stocks in a cash account. You can't open a margin account with less than 2k, you can't use leverage in an IRA, etc., etc. Are these rules depriving us of freedom? Should there be no rules whatsoever? No idea what this is about. Who doesn't know or care? With whom are you arguing? I don't recall anyone saying that they did not respect, appreciate or care about their freedom. Are you just cranky this morning? Peace, Chas. It's a beautiful day here in Fla. Enjoy it! RS7
I don't think the tangibility of the benefit needs to be brought into question; MANY jobs have no tangible benefits. Trading does bring the benefits of liquidity (facilitating price discovery) and risk transference. William might argue about the actual extent of such benefits but surely he cannot disagree that they exist. I get the feeling that William has an issue with trading not doing anything 'constructive' for society (in his opinion). Even if that were the case, is it really a 'problem'? Not for me. Man is a free beast, under no obligation to anyone but himself. Ironically, the flow on effects produced by this selfish self-interest function to create a better world for greater society anyway. (Witness the pitiful standard of living in nations that embraced the idea that man's duty was to the social good; Soviet Union, Cuba etc..)
I'd disagree with you there man. I spent about half of my life in the USSR (both while it was still intact and after the collapse.). The pitiful standards were a result of a lot of things that I can write a book about. I don't think the duty to the social good was one of them. I have since lived in the states for a while and believe me or not, it kinda reminds me of the Soviet Union in the early eighties in terms of how organized things are. You haven't been there, so don't judge. While I certainly agree that the capitalistic approach has proven itself, the collapse of the USSR had nothing to do with that system not being viable or being inferior (I don't think it was, at least not in the ideas, in execution - maybe). Of course, the way a capitalistic society functions, and encourages entrepreneurship is all great and all, but you guys could have a much better standard of living if you didn't take it to such extremes. I think a mixture of what you have with what the USSR was trying to do would be ideal. Here's what I mean: If Bill Gates, when he was, say 17, was told that if he'd do all the things he wanted to do, he'd earn, say a billion - he'd still do it. While you do have a healthy middle class, I think the society would have benefited substantially from a better distribution of wealth. If the top class had about half of it's wealth taken in taxes and the $ were used for the good of society (e.g. your secondary education and health care SUCK), you'd still have plenty of incentives for people to wanna get to the top, and yet, the standards of living would be much better on average. I don't think it's OK that some pro boxer can punch someone in the face for half an hour and get 20 mil for it. 100 grand is probably the max that effort deserves. I left many things out since I'm busy at the moment, and that might have rendered my arguments a bit less convincing... But I hope you see what I was driving at.
Vlad, Damn fine English! My Russian friend has been here 30 years and is brilliant, but can't spell "cat". Taxes and society....Sounds like LBJ's Great Society. A good idea at the time. Didn't quite work out, just because of the inefficiency that is inherent in projects like that. Sort of like the USSR. But you are right, our secondary education and our health care are shameful. The collapse of the USSR was Reagan, and the US outspending the Soviets. This was just one of those cosmic accidents. Reagan was told about "The Red Menace". And about the "Star Wars" project. So being Reagan, he figured we were going to be invaded by Mars, and gave the okey dokey to the "Star Wars" deal. Spent those suckers right into the ground!!! Market impossible to trade today. Up, down, up, down. Time to quit for the day. I know when I am not smart enough to figure it out. RS7
Cuba is a terrible example.... Its a dictatorship that has not "embraced the idea that man's duty was to the social good." Just look at tourism and all the golds it has brought Mr. Castro. All of the citizens of Cuba live under a dictatorship ; While foreigners invest in land and hi rise 5 star hotels ( which Cubans themselves are not aloud in) to further fill the coffers of Fidel ( which by the way has/had a net worth according to Forbes as well over $10billion or 1% of the Cuba's gdp at the time of the article)... They are still waiting for their revolution.