The obvious solution (along with many other problems) is to prevent or disincentivise short term ownership of stocks. If you have to commit to owning them for four years you're going to be a lot more careful about which ones you buy.
Meritocracy is a terrible framework. All you're doing is conflating greed, willingness to exploit, luck, and scarcity of attributes with goodness. Noone deserves anything other than access to a healthy community and a share of those things we have enough of for everyone.
Capital (ie. the control over the physical commodities of the world including accumulated past labour whether assigned by markets, by political power, or by favour of those higher in a heirarchy) is agglomerative, and systems that don't redistribute it are pathologically broken. If your system assigns power and privilege to power, then you wind up with mentally ill power-seekers in control of everything. It should then be hardly surprising that they abuse the people under them and oppress and kill in order to get even more power.
I just want to point out that what you're describing isn't meritocracy... you're describing what happens when systems are not meritocratic, or when meritocracy breaks down.
The "meritocracy trap" is well-known (see for example Michael Sandel's critique of same), but it says more about what changes are needed to get to a more truly meritocratic state, than it does about what meritocracy fundamentally is.
Subsidiarily, the critique of meritocracy says less about how good or bad meritocracy is, and more about how the real world we live in is not meritocratic at all.
The danger is not "meritocracy" itself, the danger is fooling yourself into thinking that you got where you are because of merit rather than a lot of luck.
The entire financial services industry is not even 20% of the labor force, and high-frequency trading is only a tiny fraction of that. If we eliminated HFT it would have only a tiny impact on labor costs and electricity usage. And it might slow down overall economic growth by increasing the liquidity premium component of the cost of capital.
That would probably just advantage the rich who can afford to keep much of their assets locked up for long periods of time, and even borrow against them.
The market is not narrowly focused on next quarters performance. That is a total myth in my experience. Investors want growth and they think long term. They are willing to invest in companies that do not have profitability because of where they think that company will be far in the future.
Meme stocks are kinda interesting. The amounts invested by individual investors really shouldn't matter too much, but in some cases they really do. Ofc, with some stocks institutional investors are on the ride and can use other tactics to manipulate the price.
One has to wonder are there some fund managers there who actually are affected by the meme stocks. Or follow those as investment reasons. Which feels kinda worrying in bigger scheme of things...
I don't think that this analysis is correct. There is a misunderstanding as the author confuse his situation of 'very tiny' stockholder holder with the global situation of the stock market.
As in real life, if you own one millionth of something, your voice will mean nothing.
But big shareholders have power. At any time they can summon an extraordinary meeting to revoke the directors or even force the company to go in a certain direction. They also decide if they will give/let income/capital funds in the company for investment or to take it all. Reducing the company capacity to expand.
As a small shareholder, you can group with other small shareholders to form a group with a critical mass of voting power.
Also, if small shareholders don't believe in the company and sell, the price of the share will go down, that will impact the valuation for big one also, that could use their power for change is the situation goes too bad
Without a stock market some have cash and Others with lots of money run the companies and remain the rich oligarchy. Much more than now. Prohibiting people from investing in companies is apocalyptic (USSR,Venezuelan economy)
I don't know how the world would change if capitalism was very rapidly removed everywhere, but certainly the human condition today (7 billion people, highly mechanized distribution of heating/cooling/water/food, with long elaborate supply chains) is much more susceptible to rapid economic changes than in ages past. We're likely to see a lot of starvation >1% due to supply disruptions caused by war over the next 12 months in any case.
Maybe centrally planned economies could be made to work?
Maybe currency and investment could be directly controlled?
What fraction of the population would be allowed to starve and die?
You don't need capitalism to deliver anything, you need competent organization and people who will do the organized work. Tell me how many of the people working in those supply chains (truck drivers, ship mates, Amazon warehouse workers) think the system is working for them under capitalism. Joint stock / pooled risk and profit, and abstraction of ownership in a way that mirrors cash as an abstraction of value, were innovations for sure. Other innovations or adjustments maybe difficult to make in today's brownfield world.
My take is that central planning's problem wasn't one of where the planning took place, it was one of data quality (freshness, accuracy), inadequate data, and problems in the agenda for using it. Integrated macro- and micro-planning will still suffer from the central-agenda issue, depending on the motivations and means of the planners. But coordination up and down, for purposes that are not exclusively for the generation of cash, seems worth exploring.
Discussion today in one paper about prescribed burns in Yosemite held up due to air quality laws, but no mention of jailing Mother Nature for the air quality violations of a major forest fire. I suspect the long-term sustainable carrying capacity of the Earth for humans is rather less than the number outstanding today, but starve and die seems worse than options we could engineer if we wanted to. Fight in battles and die will be a lot of them too if things swung the wrong way.
We need economies that allow nations to distrust each other, and in the USA at least allow every individual to distrust every other. Socialism seems to work best for those who buy into a social contract and the USA is losing those people left and right, egged on from within and its adversaries.
Commmunism never worked. Util we develop artificial superintelligence it will not work. Billions of people making decisions involves ridiculous amounts of data and processing power. Human brain has around 100 trillion synapses and there is around 8 billions of humans.
Social market economies exists and do fine - Nordic countries, even China.
That's the only version of "communism" I can see as a steelman.
Communism as a centrally planned economy can not work until central planning system will be as smart and knowledgeable about peoples needs as the people themselves.
Communism had the problem of the centralized agenda run by a few power-hungry humans, which isn't very communal. That was the agenda problem. As you get more people into it the communal aspect got weaker.
If you imagine apocalypse today like a nuclear war, that would still not be as bad as humans had it when only barter was known. The very poorest parts of the world are still beter off than most of the people before 1700. Only 200 years ago 4 out of 6 children were dying before they were 10.
Sure, if you're the kind of person that thinks more broadly about the world and its history. For everyone complaining about a sh*t job today, there was working in a meatpacker circa 1905 to make you not complain now. But most people just compare themselves to the Joneses right now.
It's a reference to the Bible story of Saul becoming Paul. God strikes Saul blind by putting scales (as in karatin, not a weight-measuring device) on his eyes. Later, when Saul decides to stop persecuting Christians, the scales start to fall from his eyes, he regains his sight, and changes his name to Paul.
Meme/cult stocks existed before too, but they were pushed on TV by Jim Cramer and other paid goons. The analysis presented here is mostly correct, but limited for assuming that something was uncovered recently.
I'm pretty sure the origin of shareholding was that it allowed the owners of corporations to avoid liability for the criminal actions of the corporation, and to limit possible losses to the value of the shares.
For example, imagine a corporation that specializes in Ponzi schemes and other methods of systematic defrauding of its customers. By becoming a shareholder in that corporation, one can profit from that criminal activity, and if any prosecution ever takes place, it will only be the employees and executives of the corporation who go to jail, not the shareholders. This is really what investment capitalism is all about: ownership without responsibility.
This is of course a simplified picture as shares are only one of a variety of securities, and understanding what securities are is the first step in financial education:
> "Securities appear in different forms such as bonds, stocks, bank notes, futures, options, forwards, swaps, etc. Depending on the distinguished characteristics that each of these securities holds, they are categorized into different types such as debt securities and equity securities. The securities that are used for the purpose of obtaining credit such as bank notes, debentures, bonds are known as debt securities. The securities that are being transacted as a result of the investors’ interest towards the assets of firms are known as equity securities such as stocks and shares. Further, the derivatives including options, futures and forwards formulate an agreement between two parties to buy or sell assets in the future date at a pre-agreed price."
> I'm pretty sure the origin of shareholding was that it allowed the owners of corporations to avoid liability for the criminal actions of the corporation, and to limit possible losses to the value of the shares.
This statement has so many issues.
1. According to wikipedia it was awarded to trade guilds and monasteries in the 15th century, way before the advent of corporations
2. it's a stretch to say a particular nefarious use of something (in this case limited liability to avoid criminal liability) is the "origin" of something. There are non-nefarious uses of limited liability, eg. in the case of a bad investment. Saying otherwise it's like saying "the origin of a defense lawyer is to allow criminals to avoid punishment".
3. being in a corporation doesn't magically make you immune to prosecution. You can't form a hitman LLC to murder people with impunity. Being in a corporation does make it harder to assign blame, and it's easier to prosecute corporations than people (they don't have 5th amendment rights for instance), which is the reason why you see cases of the corporation paying a fine or whatever but the directors getting off scot free.
It's called Value Investing. Buy stocks that pay dividends instead of chasing growth. It is thoroughly out of fashion and dividends have been dwindling for decades but maybe it needs to become cool again.
'In the short run, the market is a voting machine but in the long run, it is a weighing machine.' - Benjamin Graham
Voting machines are susceptible to cults. Weighing machines less so.
At the end of the day, stocks exist to return dividends to their shareholders. Those that don't will eventually become worthless, no matter how fervent the cult around them.
The 'long run' is just a bunch of 'short runs' glued together in an infinite sequence.
Given that what Graham said does not falsify what the author of this piece claims.
Sure maybe the cults would rotate, so today is all about Tesla and Gamestop tomorrow will all be about cryonics and life extension companies, but there will always be a certain % of cults in the stock market, and they'd dominate the conversation because of the meteoric rise in the price of the stock, that would compel people to think about how their lives would have changed had they thrown their money at it in the early days.
Not saying the author is wrong, just pointing out that his viewpoint has been around for a while and is part of a larger framework for thinking about investing.
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[ 2.4 ms ] story [ 110 ms ] threadhttps://ltse.com/companies/
Saves wasting 20% of the labour force and gigawatts of electricity on hfc and other fintech too.
Capital (ie. the control over the physical commodities of the world including accumulated past labour whether assigned by markets, by political power, or by favour of those higher in a heirarchy) is agglomerative, and systems that don't redistribute it are pathologically broken. If your system assigns power and privilege to power, then you wind up with mentally ill power-seekers in control of everything. It should then be hardly surprising that they abuse the people under them and oppress and kill in order to get even more power.
The "meritocracy trap" is well-known (see for example Michael Sandel's critique of same), but it says more about what changes are needed to get to a more truly meritocratic state, than it does about what meritocracy fundamentally is.
Subsidiarily, the critique of meritocracy says less about how good or bad meritocracy is, and more about how the real world we live in is not meritocratic at all.
The danger is not "meritocracy" itself, the danger is fooling yourself into thinking that you got where you are because of merit rather than a lot of luck.
But that doesn't mean that chasing perpetual short-term returns is the best way to grow an economy.
One has to wonder are there some fund managers there who actually are affected by the meme stocks. Or follow those as investment reasons. Which feels kinda worrying in bigger scheme of things...
As in real life, if you own one millionth of something, your voice will mean nothing.
But big shareholders have power. At any time they can summon an extraordinary meeting to revoke the directors or even force the company to go in a certain direction. They also decide if they will give/let income/capital funds in the company for investment or to take it all. Reducing the company capacity to expand.
As a small shareholder, you can group with other small shareholders to form a group with a critical mass of voting power.
Also, if small shareholders don't believe in the company and sell, the price of the share will go down, that will impact the valuation for big one also, that could use their power for change is the situation goes too bad
Thanks for elaborating on why shareholder value is bad for all but "big shareholders"!
A small shareholder certainly can't command power over a larger shareholder, but their interests tend to align in most cases.
Maybe centrally planned economies could be made to work?
Maybe currency and investment could be directly controlled?
What fraction of the population would be allowed to starve and die?
My take is that central planning's problem wasn't one of where the planning took place, it was one of data quality (freshness, accuracy), inadequate data, and problems in the agenda for using it. Integrated macro- and micro-planning will still suffer from the central-agenda issue, depending on the motivations and means of the planners. But coordination up and down, for purposes that are not exclusively for the generation of cash, seems worth exploring.
Discussion today in one paper about prescribed burns in Yosemite held up due to air quality laws, but no mention of jailing Mother Nature for the air quality violations of a major forest fire. I suspect the long-term sustainable carrying capacity of the Earth for humans is rather less than the number outstanding today, but starve and die seems worse than options we could engineer if we wanted to. Fight in battles and die will be a lot of them too if things swung the wrong way.
We need economies that allow nations to distrust each other, and in the USA at least allow every individual to distrust every other. Socialism seems to work best for those who buy into a social contract and the USA is losing those people left and right, egged on from within and its adversaries.
But social market economies do work right now.
That's the only version of "communism" I can see as a steelman.
Communism as a centrally planned economy can not work until central planning system will be as smart and knowledgeable about peoples needs as the people themselves.
OP seems to be partway through some scales-falling-from-eyes event.
The first sentence of the article says it all.
Different companies really can have some particular layer of superstitious groupthink depending on how deeply they are affected by this.
For example, imagine a corporation that specializes in Ponzi schemes and other methods of systematic defrauding of its customers. By becoming a shareholder in that corporation, one can profit from that criminal activity, and if any prosecution ever takes place, it will only be the employees and executives of the corporation who go to jail, not the shareholders. This is really what investment capitalism is all about: ownership without responsibility.
This is of course a simplified picture as shares are only one of a variety of securities, and understanding what securities are is the first step in financial education:
> "Securities appear in different forms such as bonds, stocks, bank notes, futures, options, forwards, swaps, etc. Depending on the distinguished characteristics that each of these securities holds, they are categorized into different types such as debt securities and equity securities. The securities that are used for the purpose of obtaining credit such as bank notes, debentures, bonds are known as debt securities. The securities that are being transacted as a result of the investors’ interest towards the assets of firms are known as equity securities such as stocks and shares. Further, the derivatives including options, futures and forwards formulate an agreement between two parties to buy or sell assets in the future date at a pre-agreed price."
https://www.differencebetween.com/difference-between-shares-...
This statement has so many issues.
1. According to wikipedia it was awarded to trade guilds and monasteries in the 15th century, way before the advent of corporations
2. it's a stretch to say a particular nefarious use of something (in this case limited liability to avoid criminal liability) is the "origin" of something. There are non-nefarious uses of limited liability, eg. in the case of a bad investment. Saying otherwise it's like saying "the origin of a defense lawyer is to allow criminals to avoid punishment".
3. being in a corporation doesn't magically make you immune to prosecution. You can't form a hitman LLC to murder people with impunity. Being in a corporation does make it harder to assign blame, and it's easier to prosecute corporations than people (they don't have 5th amendment rights for instance), which is the reason why you see cases of the corporation paying a fine or whatever but the directors getting off scot free.
[1] https://en.wikipedia.org/wiki/Limited_liability
Voting machines are susceptible to cults. Weighing machines less so.
At the end of the day, stocks exist to return dividends to their shareholders. Those that don't will eventually become worthless, no matter how fervent the cult around them.
Given that what Graham said does not falsify what the author of this piece claims.
Sure maybe the cults would rotate, so today is all about Tesla and Gamestop tomorrow will all be about cryonics and life extension companies, but there will always be a certain % of cults in the stock market, and they'd dominate the conversation because of the meteoric rise in the price of the stock, that would compel people to think about how their lives would have changed had they thrown their money at it in the early days.