Redditors are right about the unfairness of the market • Hacker News Board

Re: Redditors are right about the unfairness of the market

#81

Post by ploek » Fri, Oct 01, 2021, 1:59 PM UTC

Semaphor wrote: post #37

lexicality wrote: post #31

I was having trouble getting through the maze of popups even with (or because of?) ublock set to aggressive so https://archive.is/wXjiI

Weird, even when I disable uMatrix and Firefox ETP to leave it to just uBlock I get no popups? Maybe they advertise more heavily based on geolocation?

Hm. With (only) uBlock I get a subscription overlay that I can't get to go away, keeping me from reading the article.

With uMatrix and uBlock I can read the article, but get the subscription thing at the end of it.

(Hi CW! It's Fraggy :))

Re: Redditors are right about the unfairness of the market

#82

Post by cudgy » Fri, Oct 01, 2021, 1:59 PM UTC

SkipperCat wrote: post #53

_wldu wrote: post #42

I've been down-voted for years for saying this, but I am right. The stock market is a scam. Just like casinos in Las Vegas. The house wins more often than we do. 'You need to diversify' simply means 'Give us more of your money'. Don't fall for it. It's just rich people and politicians taking money from less rich people. If you want to double your money, fold it over and put it in your pocket (and buy real things that…

Not trying to be a hater, but if you follow most investing advice, you can do really well in the stock market. Don't try to pick stocks, just buy low load index funds (SPY, Russel2000) and hold onto them. Doing that, you can get above 6% yields over the course of a few decades. This has worked really well for so many people. Its boring, there's nothing sexy about it but you will retire with a decent chunk of cheddar.…

If everyone buys the same index funds, then all the money chases the same stocks within those index funds. The system feeds on itself resulting in overpricing of the index stocks which may not work out well during a sell-off. Index funds have risks too.

Re: Redditors are right about the unfairness of the market

#83

Post by fennecfoxen » Fri, Oct 01, 2021, 2:01 PM UTC

cudgy wrote: post #74

fennecfoxen wrote: post #69

Earlier quoted context omitted.

How is it a scam? You buy stock. You own a share in a company, or in a company that owns more companies. The company makes money. It pays that out by dividends or share buybacks. You sell it decades later, hopefully for a profit. That's the deal. That's what's for sale. You want to blame HFTs or whatever? Bah. Worst case you're losing a fraction of a percent of your initial purchase. You've got absolutely nothing on…

Sounds like you agree, except you don’t use the word “scam”.

Not really? I mean if I went to the farmer's market and decided that instead of buying vegetables, I wanted to make a bunch of money buying and selling vegetables, and I ended up losing all my money, I'd be hard-pressed to call the market a scam either, even if some of the farmers do have inside information on the upcoming radish harvest.

Re: Redditors are right about the unfairness of the market

#84

Post by ericmay » Fri, Oct 01, 2021, 2:02 PM UTC

rapsey wrote: post #72

fennecfoxen wrote: post #69

Earlier quoted context omitted.

How is it a scam? You buy stock. You own a share in a company, or in a company that owns more companies. The company makes money. It pays that out by dividends or share buybacks. You sell it decades later, hopefully for a profit. That's the deal. That's what's for sale. You want to blame HFTs or whatever? Bah. Worst case you're losing a fraction of a percent of your initial purchase. You've got absolutely nothing on…

>How is it a scam? You buy stock. You own a share in a company, or in a company that owns more companies. Because the stock you buy may not have been actually bought by your broker. Which is the entire point of the GME saga which you completely misunderstand. A stock has no business being shorted over 100% in a market that is not a scam. Major firms can get away with crimes like naked shorting and no one can do anyth…

It's more complicated than that. The GameStop saga notably didn't occur with other brokers, such as Vanguard, where shares were "in-stock" if you'll pardon the pun and available for purchase or sale. The volatility of $GME caused issues with the settlement system. That doesn't make "the stock market" a scam.

> A stock has no business being shorted over 100% in a market that is not a scam.

I'm not sure this is a strong argument for a scam, but is a strong intuitive argument for correcting a problem with how the stock market functions.

Re: Redditors are right about the unfairness of the market

#85

Post by j-pb » Fri, Oct 01, 2021, 2:02 PM UTC

strken wrote: post #71

_wldu wrote: post #42

I've been down-voted for years for saying this, but I am right. The stock market is a scam. Just like casinos in Las Vegas. The house wins more often than we do. 'You need to diversify' simply means 'Give us more of your money'. Don't fall for it. It's just rich people and politicians taking money from less rich people. If you want to double your money, fold it over and put it in your pocket (and buy real things that…

It's the inverse of a casino, because economies grow instead of shrink. If you bought shares at random, you'd make money on average, like a casino where the house loses more often than it wins. Rich people and politicians are absolutely skimming off the top in various legal and illegal ways, but they skim off less than economic growth adds.

At some point the pyramid has to reach a bottom.

There is no infinite grown in this universe. Especially not exponential growth.

Even if you assume that we'll reach space at some point and infinitely expand into the universe. Resources available to that civilisation will grow at most cubically (based on the fact that our universe has 3 dimensions).

That growth is not caused by magic, the reason why you'd still get a return of investment is because that growth has been fuelled in an unsustainable way with externalised costs.

So for the "small long term investor" the pyramid ends at enslaved children in Bangladesh sewing shirts and shoes, overfished oceans, pollution, and climate-change.

Pensioners and small investors get scammed by the rich and powerful above them, the kid in Bangladesh, the Somalian fisherman, the person dying during a hurricane, flood, or heatwave, got scammed by everybody else above them.

Somebody gets scammed when there is a continuous indefinite return from a single investment.

Re: Redditors are right about the unfairness of the market

#86

Post by me_me_me » Fri, Oct 01, 2021, 2:04 PM UTC

_wldu wrote: post #42

I've been down-voted for years for saying this, but I am right. The stock market is a scam. Just like casinos in Las Vegas. The house wins more often than we do. 'You need to diversify' simply means 'Give us more of your money'. Don't fall for it. It's just rich people and politicians taking money from less rich people. If you want to double your money, fold it over and put it in your pocket (and buy real things that…

Its not a scam but a platform on which a lot of scams are taking place. If you are on the right side of the line your scam will be swept under the rug, otherwise you go to prison for running a scam.

The actual buying of shares is hardly a scam but the more complicated and removed from reality investment tools are used the scamyness comes out.

Buying an index fund over long term will not scam you.

Re: Redditors are right about the unfairness of the market

#87

Post by sidlls » Fri, Oct 01, 2021, 2:06 PM UTC

aqme28 wrote: post #27

auslegung wrote: post #2

This wouldn’t work, but my hot take is that anyone with potential insider information can only buy/sell index funds.

What this would mean is that insiders with large holdings of stock (due to e.g. grants) would be forced to quit their jobs just so they could have some liquidity. That's a terrible incentive.

Most, if not all, insiders shouldn't be in a situation where they need that kind of liquidity in their company shares. I'd argue that if they are their incentives aren't aligned with their role as an insider and they should be removed anyway.

Re: Redditors are right about the unfairness of the market

#88

Post by cudgy » Fri, Oct 01, 2021, 2:10 PM UTC

Spivak wrote: post #45

_wldu wrote: post #42

I've been down-voted for years for saying this, but I am right. The stock market is a scam. Just like casinos in Las Vegas. The house wins more often than we do. 'You need to diversify' simply means 'Give us more of your money'. Don't fall for it. It's just rich people and politicians taking money from less rich people. If you want to double your money, fold it over and put it in your pocket (and buy real things that…

How does this work with inflation? Like you have to put your money somewhere that’s appreciating at at least the rate of inflation or you’re losing money.

Don’t forget about risk vs return. Stocks generally do well with inflation as well, assuming they have pricing power and some earnings growth. The problem today is that the fed has ignored inflation by using under-weighted statistics and manipulated rates to an artificially low level. This has created an imbalance that might snap (and may be starting to snap now) which creates a shock to currently bubble equities.

Re: Redditors are right about the unfairness of the market

#89

Post by Clubber » Fri, Oct 01, 2021, 2:11 PM UTC

Atlas667 wrote: post #80

Jolly, what a surprise... This article is just paying lip service to everyone who already feels this is the case (most sane people) and redditors. Just for gathering some traffic. The real truth is in understanding that this is fundamentally unstoppable within our economic mode of production. No ammount of regulation or de-regulation will prevent a system based on individual profit accumulation from becoming corrupt.…

Throw people in jail for insider trading. Prosecute it as hard as we prosecute people stealing $2 bags of chips from the grocery store or passing counterfeit $20s.

Also, why are government employees accused of malfeasance allowed to quit and not get prosecuted? Why is that even a thing?

Re: Redditors are right about the unfairness of the market

#90

Post by fennecfoxen » Fri, Oct 01, 2021, 2:12 PM UTC

rapsey wrote: post #72

fennecfoxen wrote: post #69

Earlier quoted context omitted.

How is it a scam? You buy stock. You own a share in a company, or in a company that owns more companies. The company makes money. It pays that out by dividends or share buybacks. You sell it decades later, hopefully for a profit. That's the deal. That's what's for sale. You want to blame HFTs or whatever? Bah. Worst case you're losing a fraction of a percent of your initial purchase. You've got absolutely nothing on…

>How is it a scam? You buy stock. You own a share in a company, or in a company that owns more companies. Because the stock you buy may not have been actually bought by your broker. Which is the entire point of the GME saga which you completely misunderstand. A stock has no business being shorted over 100% in a market that is not a scam. Major firms can get away with crimes like naked shorting and no one can do anyth…

Meh. GME didn't stop trading because some fund had shorted the shares. They stopped trading because people couldn't be sure firms like Robin Hood would be good for the money. No one was prepared to go to bat and procure millions of dollars in meme-stocks for them, then be on the hook when those millions in dollars didn't show up.

And everyone whined and whined and whined about "different rules for hedge funds!!!" Of course the big players pay the big fees to put their millions of dollars on the exchange directly, and have to do many things to limit the exchange's risk, like comply with rules and get audited and post collateral — oh, hey, that's what Robinhood didn't have enough of to execute your trade; maybe we're playing by the same rules after all...