Honestly what would happen if the stock market didn't exist. It seems like these days the price of stock is so disconnected from lived reality that genuinely confused if it would be all that catastrophic
Honestly what would happen if the stock market didn't exist. It seems like these days the price of stock is so disconnected from lived reality that genuinely confused if it would be all that catastrophic
Well we’d go back to an era where private capital owns the world. The public would not be able to participate or benefit from the ownership of companies and share in the prosperity.
Yes, hard to imagine this crazy timeline where private capital rules the world. Totally inconceivable.
"It's not good so let's make it worse"
Cryptocurrencies everywhere.
Private capital doesn't own the U.S.?
BREAKING: Countries other than "U.S." found to be members of so-called "world"
Although I'm not sure what he's on either. Capitalists definitely own and exploit pretty much the entire world, with few exceptions.
I should of used the term "equity" instead of "capital". I meant that the worlds largest companies would no longer be able to be owned by public equity and would only be available to those in the exclusive club of private equity.
I mean the average person already barely has any participation at all, and certainly doesn't benefit from it when their money gets dumped down the toilet because of some widespread financial scams and grifts that repeatedly happen over and over again.
62% of adult Americans own stock.
And how many of those people are actively making decisions about what companies they are investing in instead of blindly putting money into a black box 401k account because they are financially punished for not doing so?
Does it matter? They could blindly buy an SP500 index and benefit greatly (as most Americans do).
Not by choice. Stocks are pushed onto Americans (as well as Europeans, and most people in the West) via their pension funds, advanced savings accounts, and sometimes even their salaries (via options). If normal savings accounts in their local credit union would offer adequate interest rates (and if paying in stocks was outlawed by their unions) stock ownership would plummet. I would be surprised if it would even exceed 2%.
That’s a good thing!
Anywhere else you put money as an investment will barely match inflation.
That feels like a disadvantage by design. In a different (and more fair) economy, investing in government bonds or a savings account in your local credit union would give you a better deal then leaving your money with a global hedge fund conglomerate which in turn invests your money into all sorts of unethical companies, including oil and weapons companies.
It's not disconnected from reality. You just don't understand it.
If the stock market didn't exist you would have less opportunities to invest in well priced companies and people would be manipulated in investing in opaque, often ridden with accounting shenanigans things like private equity.
The more companies are public and subject to price discovery done by sophisticated players the better it is for uninformed players like normal investors but also less sophisticated informed players like pension funds.
> people would be manipulated in investing in opaque, often ridden with accounting shenanigans things
This happens even with the stock market. See every financial crisis.
Like which one? 2008 crisis was caused by reckless lending by banks as a result of silly regulation (government guaranteeing loans), implicit promise of bailouts and you could argue corruption. What does it have to do with the stock market?
It's a nice dismissing soundbite but you're just missing the broader point and real issues coming with people's money being invested in non public entities.
Besides, just because some problems also happen with solution A doesn't mean they wouldn't be worse with solution B. You are not really making a point just dismissing the idea of a public market without understanding the value of it.
I hypothesize all dividends, no share value. How would that world look
that makes no sense. companies need capital, that's why there is a stock market. dividends are paid from past earnings, never capital (earnings are only a %age of the value of the capital) and not from higher expectations of the future.
In a perfect world… reality is different, however.
Plenty of companies take on debt to pay dividends, e.g. just before going public.
growing companies generally have capital needs that exceed retained earnings, so paying dividends would by definition increase capital need.