<We are in the stock market to make money.>
Art, I wonder if that's the main reason. Certainly, the money is the scoreboard, but Irwin Jacobs for example, is not in the stock market to make money. He's in the stock market because he's on a mission. I think that to a greater or less extent, a lot of people are like that.
The more we are up Maslow's hierarchy of needs, the less we are in the market to make money. At some stage, we are in the market to lose money - not really, because that's a pointless thing to do, but when we take on extreme risks, with 99% probability of failure, we enter the realm of philanthropic investing. But if we succeed in creating some amazing new thing, then profits are extreme, benefits to billions of people are huge and even more can be done.
But investing in super high risk stuff will be a loss-making effort, other than in exceptional times. $ill Gates for example, is trying to kill off malaria. One way to do that, is to invest in blue skies, super high risk, biological investigations, with a low probability of success, and even a low probability of profit, even if successful, but with major benefits.
He's got a big load of money he needs to spend. I doubt that making money will feature highly on his investment criteria.
I don't have it figured out properly, but I don't think making money is the only reason we invest in stocks, or even the dominant one. Cigarette stocks yield a good return - much better than telecosmic speculative investments, but not many of us are buying.
Mqurice |
