CB -
If you buy stocks because you want a share of the business, you aren't gambling . You share the risks that businesses always have. The future is uncertain. Your capital investment, in theory, is used by the business to create more value. If you choose wisely and put the share certificates into a vault, over a long enough period of time you, or your heirs, will do well. I wouldn't mind having the fruits of a share of GM, Ford, IBM or AT&T bought at the tippy top in 1929.
Gambling creates nothing.
Good post.
Some nitpicks.
Your capital investment, in theory, is used by the business to create more value.
Only for actual primary and secondary offerings. The real value to the company is the fact of existence of the broad and liquid secondary equities market. This encourages the founders, insiders and venture capitalists to start and support enterprises by reducing and sharing risk and increasing potential and actual rewards.
Short term trading is a negative sum game, but serves the purpose of providing liquidity to the markets. Even investing would be negative sum, were it not for the combination of value made available by the losing traders and the corporate insiders and VCs. While some companies
can be held profitably over decades, even most good companies have shorter lifespans.
Regards, Don |
