The stakes are much higher but yes.
The Stock Market is Just Financial Fantasy Sports
Submitted 20 hours ago by anonymouse2@sh.itjust.works to showerthoughts@lemmy.world
Comments
Goodlucksil@lemmy.dbzer0.com 19 hours ago
MadMadBunny@lemmy.ca 14 hours ago
So is the adrenaline rush…
gustofwind@lemmy.world 17 hours ago
It’s getting pretty close to astrology these days
IWW4@lemmy.zip 18 hours ago
I will do you one better. The Stockmarket is more like a roulette wheel.
Blue_Morpho@lemmy.world 16 hours ago
A roulette wheel gives everyone a fair chance with only the house (stock exchange) taking a cut.
The stock market lets people who make giant bets give themselves an advantage. Also if they are famous or powerful they can announce what they are going to pick which will help make that number win.
pinball_wizard@lemmy.zip 14 hours ago
Then there are HFT’s which is like if the house let really rich people install a camera tied to a computer and place bets just before the ball lands in the slot.
Not only that, but the winnings of camera instabet players are automatically deducted from everyone else’s winnings.
ryrybang@lemmy.world 15 hours ago
Exhibit 1: www.multpl.com/shiller-pe
Exhibit 2: Tesla’s 323 P/E ratio and $1.6 trillion market cap.
henfredemars@infosec.pub 16 hours ago
With a positive expected value, in theory, so long as we’re able to sustain growth forever.
db2@lemmy.world 16 hours ago
It’s a casino but the odds have been overwhelmingly stacked toward the house, and they get away with it because the officials overseeing it all cheat.
rook@lemmy.zip 13 hours ago
What are memecoins then?
sp3ctr4l@lemmy.dbzer0.com 16 hours ago
Former econometrician here:
Yes. Correct.
Ever since stock buybacks became the bog standard default, and P/E ratios are between ‘significantly elevated’ and ‘completely fucking delusional’…
Yep. None this shit makes any real sense.
Which is actually a huge problem.
Because… the economic ‘point’ of a stock market, in capitalism, is more or less to act as a kind of giant, collective brain, that figures out how to efficiently and rationally allocate capital and investments.
The ‘invisible hand’, and all that.
So when that brain spends a decade or two more or less in a euphoric psychotic break… well… it doesn’t exactly make sound financial choices.
Which translates into about two decades of nonsensical investment of a society’s resources.
Less ‘theoretically’: Its a giant gambling machine, and if you’re not rigging the game yourself, 99.9999% chance you’re the mark, you’re gonna lose.
And you won’t see it coming, not untill its too late for you to get out intact.
Economists have for a long time referred to state run lotteries as effectively an ‘idiot tax’, because anyone who can do fairly basic statistics also knows they’re very likely to lose money, thus, only idiots gamble.
The stock market as it is now more or less represents a more complex version of the same kind of thing… you’ve got the day traders, and they almost always get their clocks cleaned, they just develop a neurotic-obsessive personality based on ‘no, I’m the one guy that can outsmart the market’.
No, you can’t.
uncouple9831@lemmy.zip 14 hours ago
You mean 500 p/e for an established company isn’t reasonable just because they scribbled AI on a piece of paper?
yesman@lemmy.world 9 hours ago
At what point do we start to consider that capitalist economies aren’t broken, but that they never worked in the first place?
sp3ctr4l@lemmy.dbzer0.com 6 hours ago
Ideally around 150 years ago, but far, far too late is better than never.
MangoCats@feddit.it 15 hours ago
I used to think that the market “drove engagement” - keeping people with money interested in the dealings of the companies they invested their money in.
Lately, I feel like it’s just a giant Casino.
sp3ctr4l@lemmy.dbzer0.com 14 hours ago
Way, way back in the day, when the primary model of stocks and the stock market was…
I buy 1 share of Company X stock, for Y dollars, and once a year, it pays me Z dollars as a dividend…
Yes, with that paradigm, it made a lot more sense to say that this ‘drove engagement’… because a stock operated more like a miniature bond in/for a company.
But, now the whole model is ‘stock price must go up forever’, nest eggs are capital gains realized upon retirement, that you take loans out against to avoid paying cap gains tax…
…not dividends gradually paid into a growing retirement savings account, managed by a regional or local bank.
Which entirely blows up that way of thinking.
IronBird@lemmy.world 6 hours ago
that is exactly how the US markets are setup, you can compare the US markets to EU or practically any other besides Japan and they’re drastically less exciting.
the US’s is designed around “maximizing lquidity” via a mix of over and under regulation all meant to increase volatility.
IronBird@lemmy.world 6 hours ago
it’s incredibly easy to beat the market when it a bull market (where do you think all these ratfucks put their illgotten gains…), i’m up 5000%+ ytd, not shorting anything just buying low selling high
sp3ctr4l@lemmy.dbzer0.com 6 hours ago
Yes, and then the trick is timing your exit or restructuring into countercyclicals … at the right time.
And timing is the part almost everyone fucks up.
Also, if you’re ‘buying low and selling high’, and you’re up 5000+ ytd?
Then you’re basically daytrading, which basically means this is a full on part time job for you, at least…
… and while did you say you’re not shortselling, you did not say you’re not using any leverage.
So uh yeah, best of luck, hope you can keep up the perfectly timed dance, and never miss a beat, nor miss an upcoming time signature change.
MarriedCavelady50@lemmy.ml 14 hours ago
Don’t index funds work better than individual stocks?
tempest@lemmy.ca 14 hours ago
They do, however a lot of people have known that for a while.
The large index funds have a lot of influence when it comes to voting.
As more and more people just invest in ETFs I do wonder if we are headed for some delightful market crash as a result.
I’m not even close to an expert though… Which is why I use index funds in the first place. Just wondering how I’m going to get screwed before it eventually happens.
pinball_wizard@lemmy.zip 14 hours ago
Index funds are much better than individual stocks. But Index fund price to earnings ratios still reflect their individual component stocks.
When the P/E ratio is 40, a rough way to read that is “it will take 40 years of stability for this purchase to pay off”.
Many people don’t have 40 working years left to wait for a stock purchase today to pay off.
And the supply of “years of stability” isn’t looking amazing, right now, either.