It seems like this question boils down to:
Do daytraders add value by daytrading?
But the big white elephant in the living room of which nobody wishes to speak is:
Is daytrading a moral profession?
So, let's talk about the elephant first. When one daytrades, one puts one's money up for grabs in a contest with others. Everybody knows (or should know - no forgiveness for the idiots here) the rules. Whoever is right wins money, to the extent they are right. It's hard to see where this might be immoral, and frankly, I do not think it is immoral. I take a certain amount of glee from the morons whom I encounter in daily life - I imagine them on the other side of all those trades that made me money.
So, on to the next question, do we add value? I'm not sure. To be honest, I haven't really given the proper consideration to the "adding liquidity" concept, but the real fact is - we do not produce anything but abstract numbers. And we get cold hard cash for it. Now, I had a job as a programmer, and I produced abstract numbers in the way of computer code. And those numbers were of immense (allow me a slight ego boost) value to those that paid me. But, are the prices we produce worth what we make? I dunno, but I doubt it.
On the other hand, I remember a story of a person who had to sell some Singer stock during a pretty bad time. He said, "What am I bid, what am I bid - I have to sell this stock!" And there was no answer. Finally somebody said (half in jest) "I bid a dollar." And he got the stock. And the seller got a tiny bit of cash, but at least he got some money. So maybe there is some merit to the liquidity arguement.
Now, if I were an excellent writer working for a big syndicate, I would tie this all up, and present a final opinion on whether daytrading adds value, but my profession is daytrading not writing. So, I leave any conclusions up to you, dear reader.
Do daytraders add value by daytrading?
But the big white elephant in the living room of which nobody wishes to speak is:
Is daytrading a moral profession?
So, let's talk about the elephant first. When one daytrades, one puts one's money up for grabs in a contest with others. Everybody knows (or should know - no forgiveness for the idiots here) the rules. Whoever is right wins money, to the extent they are right. It's hard to see where this might be immoral, and frankly, I do not think it is immoral. I take a certain amount of glee from the morons whom I encounter in daily life - I imagine them on the other side of all those trades that made me money.
So, on to the next question, do we add value? I'm not sure. To be honest, I haven't really given the proper consideration to the "adding liquidity" concept, but the real fact is - we do not produce anything but abstract numbers. And we get cold hard cash for it. Now, I had a job as a programmer, and I produced abstract numbers in the way of computer code. And those numbers were of immense (allow me a slight ego boost
) value to those that paid me. But, are the prices we produce worth what we make? I dunno, but I doubt it.On the other hand, I remember a story of a person who had to sell some Singer stock during a pretty bad time. He said, "What am I bid, what am I bid - I have to sell this stock!" And there was no answer. Finally somebody said (half in jest) "I bid a dollar." And he got the stock. And the seller got a tiny bit of cash, but at least he got some money. So maybe there is some merit to the liquidity arguement.
Now, if I were an excellent writer working for a big syndicate, I would tie this all up, and present a final opinion on whether daytrading adds value, but my profession is daytrading not writing. So, I leave any conclusions up to you, dear reader.
