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Idiomtrottning's observations regarding our current economy shed light on some misunderstandings shared by most people today: buying and selling stocks in current markets is not investing -- not at all. It is really gambling, or at best, speculation.
gemini://idiomdrottning.org/bagholders
The word 'investing' used to have a very different meaning. Let's start with the word millionaire. Today you are a millionaire in the US if your assets exceed $500,000, and it doesn't matter if they are mortgaged. Say you are about to be foreclosed on a house: you are about to be homeless, and are deeply in debt, but you are a millionaire.
Back when millionaires were properly wealthy people - because unskilled labor was valued at 10 cents a day in silver, the word investing meant something else. They rich would buy assets, but not with the goal of selling to another millionaire for a quick profit. No, they would buy assets to own assets -- buildings to collect rent, railroads that generated long-term income, or factories that manufactured profitable items. They would do so after much due diligence. Of course they would sell these on occasions, but more often than not they kept them and passed them on to their children.
The idea that an ordinary person, one who worked for a living, would 'invest' was (and still is) laughable. They still don't even know what it means.
To adjust for a century of inflation, just multiply old-timey prices by 100. Maybe $10.00 buys what a dime did. Perhaps x100 is not enough, as no one will work for $10.00 a day. A dinner and a movie was $0.25 not even a century ago. Your great-grandfather's dollar, saved and passed on to you, is worth a less penny, and 99c or more was confiscated by the state, through inflation.
Inflation makes numbers go up, but the value does not change. The ignoramuses think they made money because their house is worth double what they paid for it. Nope - everything else is doubled too. But pity the saver, the fool who stashed the cash in the mattress and didn't 'invest' it. No one except the bureaucrats wins from inflation - but many lose, especially old folks on a fixed income.
But anyway, we have billionaires today, and they still invest. They have legal and accounting teams that work the numbers and bribe the legislators to pass laws favorable to their businesses, and they will always make money.
That's investing, and sorry, you are not welcome. Come back when you have super-rich parents.
The guy who cashes in his pension to buy some Tesla stock, on the other hand, is a gambler. Sure, you can make money gambling - for a while. Especially if you don't count the losses, because you are about to hit the big jackpot and make it all back. There is a strong winner's bias - you hear stories of the 10-year-old who bought some dogecoin and is now a millionaire. You don't hear stories about the rest of the 10-year-olds who bought vertcoin, or a popsicle and made no money at all.
I have yet to meet a daytrader who admits to losing money. I know more than one person whose father lost everything daytrading. Everyone brags when they make a good gamble, and stays quiet when they lose. Eventually the house takes all, and you don't hear them at all.
In a highly inflationary environment, in a broken market - like today - a winning streak can go on for a surprisingly long time. You may think you are a genius 'investing' in random stocks.
Sorry, that is not investing. Pure gambling.
Now, buying low and selling high is speculating.
Speculation has a place in the free market - it quickly balances prices, and provides an invaluable service: it supplies the demand, and demands the supply.
Flipping houses in a hot market is not speculation - it's gambling. Buying up real estate when the market crashes and everyone says real estate will never go up again, that is what a speculator does. And sitting on them until until the market is so high that the supply is low, and selling then. Supply the demand, demand the supply.
To be a speculator you have to have balls of steel and the brain of an accountant. Speculation is a risky game - unlike an investor, you are taking chances. Well calculated - not because your buddy gave you a 'tip'. You must be a contrarian - that is, when the stock markets are high and everyone is cashing in their IRAs to buy stocks, you are shorting the market. When no one talks about mines, you are there buying for pennies on a dollar. And somehow, when there is an oil shortage, you are sitting on a bunch of futures you bought a year or two ago when there was a glut. That is what a speculator does.
Wall street benefits from idiots who know nothing about markets pouring money into brokerage houses. Since the stock is held in the 'street' name - that is, you don't own it, the broker does - they get to hold all these assets to play with. They charge commissions on transactions that are entirely fictional - when you buy 100 shares of IBM and pay commissions, your broker just makes a bookkeeping entry and matches your transaction with some other fool who is selling 100 shares, all in their own pocket. And believe me, every bit of assets of a broker is hocked, collateralized, borrowed against or otherwise hypothecated using options and futures.
And the companies issuing stock are literally printing money. Trillions of dollars are created out of nothing, paying for yachts, private islands and trips into outer space.
No one wants to be called a gambler. It sounds so much wiser and wealthier to be an investor. But these 'investors' are really just ignorant idiots.