I’m looking for your deepest abstracted definition of the history and political nuance, the philosophical, the ethics, the evolved and historical meaning, and the meaningful impact it has had in evolving political structures and systems.
This is not ELI5, or a dumb question like “What is the stock market,” /s… It is a question of dumb contexts like: what is it really under the surface, or what is it in your opinion, or what is it in principal, or what is it used for as a justification for other parts of society?
To me the stock market was started as a way for individual business owners to raise capital to make a large purchase (open a factory, etc.). Then it became a novel way to speculate on the FUTURE performance of some business. It’s become a way to make money by playing on the emotions of other investors.
And now, it’s little more than a damn casino.
If I’m not betting on your future performance, why am I giving you money to open a factory?
Good point, I suppose they are one and the same.
Systemic gambling with a house that cheats constantly.
It’s worse than that: the whales are the ones counting cards and robbing regular people blind, and the house is turning a blind eye because they’re bought off (that whole revolving door between enforcement agencies and the companies they’re supposed to regulate).
I count them as part of the house in this analogy, but appreciate the clarification for those who don’t know.
Stocks are fancy notes that the owning class convinced pensioners are better than an actual pension. This amounted to a lot of elderly people not having adequate retirements. Its also a convenient method to exploit your labor by participating in stock buybacks, which inflate the wealth of the owning class, by not reinvesting money in your company’s work force. Its a triple pronged trident to fuck the poor and allow the rich to all become avatars of Mammon.
A stock is a piece of the deed or title or charter or whatever that is the essence of the company as a piece of property.
You can buy that piece of the property for a value which fluctuates based on the value of the company as a whole, your fractional piece is tied to the value of what it’s a piece of.
The stock market is the cumulative eco-system in which people are buying and selling stocks in different companies based on fluctuations in value of different companies at different times.
The name of the game is to basically always be selling just before a downturn and always be buying just before an upswing, so that the money you’ve bought the stocks with is always growing, because your bought stocks are always growing in value, until you decide to sell them.
There is a lot of other factors to it but that’s basically it. It’s a system in which you temporarily buy small pieces of companies for the purpose of selling them once they’re more valuable than they were when you bought them.
If you’re thinking that sounds a lot like crypto, you’re not wrong, but the difference is that stocks actually have a modicum of regulation that are meant to keep people from getting fucked over quite as hard as crypto has done. Doesn’t mean that premise is always lived up to, just look at 2008, but overall the stock market represents the safest form of investment you can make other than stuff like federal investments or buying a home that you intend to pass along to your kids.
Stocks also represent a company’s net asset value. So, unlike crypto, a shareholder would be compensated by the sale of a company’s assets in the event of its liquidation. Crypto has no such safety net.
This is a pretty solid explanation.
To add some context, you used to be guaranteed a portion of profits in the company but that doesn’t happen now. Some stocks pay dividends but unless you own a lot of those, it won’t do you much good. Owning stocks now, does give you the right to participate in voting. Mark Zuckerberg owns voting control of Meta, meaning he can’t be removed from his position by shareholders because he owns enough votes (shares) that he can’t be overridden.
Another thing you hear people talk about in relation to stocks is capital gains tax. Taxes on stock depend on how long you owned the stock. Less than a year, you get charged a higher tax rate on selling because you’re flipping it for profit; short-term vs long-term gains. Those taxes is only applied to the profits of the sale.
Stocks are assets, however, and investors can borrow against it without selling in the same way you can get aa home equity loan against your house without selling your house. Since they aren’t actually selling the stock, they aren’t paying taxes on those profits.
Thats why some politicians, like Kamala Harris, have suggested a tax on unrealized gains (profits on stocks that haven’t been sold yet). It would be a way to close the loop hole of billionaires not paying their fair share. It sounds kind of shitty to pay taxes on assets you don’t have in hand until you realize how stocks are used to avoid some taxes.
A capitalism casino that somehow rules the entire economy*
* or at least many people’s view of it
When it goes up, your boss buys a mew boat. When it goes down, you lose your job.
I like the way you framed the request. Too bad the answers are either waaaaaay too long wall of texts, uninformative zingers or bitter jokes.
Here’s my attempt.
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A tool that allows a detached involvement with capitalistic production fueled by the individualistic drive for more wealth.
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A way for entrepreneurs to chase the myth of permanent growth beyond the limitations of fisical assets.
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A dangerous all compassing framework for our values that has no positive connection with the material condition of humankind.
Thanks.
Opinions of all types are welcome, as are the verbose. I read them all.
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“Rich people’s yacht money.”
Just replace 99,9% of instances containing “the economy” and substitute. Makes a lot of things click.
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And if you are rich enough, There’s no actual gambling involved. You just get money for free.
I think that a lot of people ascribe a lot of depth to how the stoke market works that is really just a farce. When it comes down to it, the stock market is a corporate popularity contest. The concept of stock was a way for someone to get a peice of the action without having to actually know or do anything. And it acted as a way for the wealthy to annoint people as worthy. Nowadays , due to growth in the number of people involved, popularity is really all that matters. People will claim it is about revenue and such, but it really is about will other people buy the stock for more.
It’s a game you play with people who has access to cheats, but your role in the game is so limited that just by playing it safe you also can win a little.
Vegas
Stonks.
It is a living, breathing holograph of commerce. It speaks, it eats, it shits. It gets horny, sad, and angry. But it is a hologram. A projection of humanity.
You’re asking this question on Lemmy, on all of places!?!? It’s not a stupid question, but I believed you’re asking it at the wrong place. (I am not defending them, though.)
