perhaps it’s that we cannot differentiate the difference in talent at the highest levels, but they can. (There’s a line in goodwill hunting about this when Will burns the math proof)
Warren Buffett rips Wall Street for turning the stock market into ‘a gambling parlor’
- Thread starter themickey
- Start date
perhaps it’s that we cannot differentiate the difference in talent at the highest levels, but they can. (There’s a line in goodwill hunting about this when Will burns the math proof)
Profitable traders strengthen the markets, losing traders weaken them.
More losing traders in the markets is great for profitable traders and brokers and market makers.
But i am not sure if it is good for the economy overall. The more people that lose the bigger the bust that comes when the bubble bursts. And the worse the recession and job losses.
investors strengthen the economy, traders do not. If investors don’t make money, they will not invest and the economy and society suffers. Traders are irrelevant.
I pointed out how they were relevant. They make markets and provide liquidity thus absorbing risk, lessening such for investors and hedgers. As far as winning and losing traders, there can be no winning traders with losing traders....at least in the futures markets. There is risk in any business, it's up to each of us how much risk/reward (potential) we choose. I offer no mea culpa for being a trader.
The problem is that when the liquidity is really needed, during a market correction, the liquidity always dries up. Trading options on single stocks during mid March 2020 became nearly impossible. Huge bid ask spreads. So they only marginally reduce risk in the sense that they reduce the bid / ask spread and allow one to enter and exit a trade at any time with minimal cost. If there were no traders, only long-term investors, then entering and exiting a stock would be very expensive. One long-term investor wanting to buy would essentially need to find another long-term investor who is selling. That would also kill the derivatives market except for maybe commodity futures as it would make buying shares to offset delta prohibitively expensive. This is why financial transaction taxes don't make sense. Yes, they would raise money for the govt at least short term, but it would increase the cost of doing business for everyone else, raise the cost of products to the consumer. No different than a gas or other sales tax.
The internet has made everything easy, anyone can now open an account in seconds. And mobile phones gave everyone the internet in their hands.
The markets have gone from a posh middle class gambling parlour to one where even the unwashed masses get to play.
It does remind me a bit of the Subprime mortgage market. I mean when you leverage up subprime borrowers and let them loose on the housing market to wildly speculate, you definitely add more liquidity to the housing market on the way up. But you know it is going to end very badly.
The markets have gone from a posh middle class gambling parlour to one where even the unwashed masses get to play.
It does remind me a bit of the Subprime mortgage market. I mean when you leverage up subprime borrowers and let them loose on the housing market to wildly speculate, you definitely add more liquidity to the housing market on the way up. But you know it is going to end very badly.
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Strongly agree. We are now responsible for our Defined Contribution pensions as opposed to Defined Benefit pensions of yesterday. Housing has become a liquid asset transacted several times over a lifetime.
We have evolved a system for which most people are ill-equipped. The fleecing of the public thru hype and narrative has never been easier. We are all traders with serious exposure across all terms whether we like it or not.
Buffet is simply jumping on the Anti-Wall Street bandwagon early. After all, he will benefit the most when things start selling for pennies on the dollar with government sweeteners. He is as much part of the system.
100%. The way he takes over companies and guts them in the name of profits is exactly why so many problems exist. Shame on him for calling out bad behaviour now.
