Re:What value do we create here?
by anamax on Tuesday April 06, 2010 @10:49AM
(#1244703)
> I define a "flipper" as someone whose sole purpose in owning a security is to pass it off at a higher price to another "flipper" down the road.
Huh? The vast majority of people own stock because they think that they'll be able to sell said stock for more money later. (Yes, they'll take dividends along the way, but since there are short-term traders who "harvest" dividends, that doesn't change things.)
With bonds, there are folks who plan to hold to maturity, but they're in the minority. Other folks are just looking for fixed income for "a while" until they come up with something else to do with that money.
> If most of the trading boils down to huge groups of firms selling back and forth to each other, it doesn't seem to matter to me whether the spreads shrink or not.
Sure it does - you benefit from the decreased spread whenever you trade.
If you really think that the spread doesn't matter to you, feel free to throw $1/share my way every time you buy or sell.
Huh? The vast majority of people own stock because they think that they'll be able to sell said stock for more money later. (Yes, they'll take dividends along the way, but since there are short-term traders who "harvest" dividends, that doesn't change things.)
With bonds, there are folks who plan to hold to maturity, but they're in the minority. Other folks are just looking for fixed income for "a while" until they come up with something else to do with that money.
> If most of the trading boils down to huge groups of firms selling back and forth to each other, it doesn't seem to matter to me whether the spreads shrink or not.
Sure it does - you benefit from the decreased spread whenever you trade.
If you really think that the spread doesn't matter to you, feel free to throw $1/share my way every time you buy or sell.