> The stock market has never done anything for me.

I mean, it could, if you were to invest.

> Shareholders making money out of my work is not exactly in my interests, nor is it in the interest of the majority of the world’s workers.

So instead of, say, encouraging people to learn how to invest, and maybe even incentivizing firms to allocate shares to their employees, you'd rather just have the whole stock market burn to the ground?

Robinhood was founded on that idea, but it turns out it's kinda hard to deliver. When people where trying to invest into this rising stock they ran out of credit at their clearinghouse and had to stop their customers from trading.

The real problem is that the stock market has historically delivered 7-9% on average, and consensus is it will likely be considerably lower in the future. Making significant money from an ownership share like that takes decades of disciplined saving and investing. The narrative of WSB that "the rich won't let poor people invest in the stock market like they do" is ridiculous; most of the rich would be very happy with 8% per year on average.

There might be something to the idea that an internet forum will have a harder time getting away with the sort of market manipulation that the most unscrupulous hedge funds do all the time, but that's a different discussion entirely.

There's of course a related discussion of how much some people can afford to invest in the stock market each year, but it's really only partially related. I do understand where the anger is coming from, as should everyone who has been following American politics since 2015 at the latest.

Statistically, in a zero sum game, where all players are equally skilled and the winner of each transaction is determined at random. The more transaction made, the more the wealth accumulates.

What this means is, that unless you are already one of the richest person on the stock markets, your most likely outcome is that you will loose money by participating. So—unless you are already rich—your optimal strategy is not to participate in the stock markets.

The stock market--just like the economy--is not a zero-sum game. I don't know what to tell you. The S&P500 over the long term has consistently performed quite well, for many decades. Maybe if your picture of participating in the stock market involves day trading, sure, statistically the majority of people who try will break even or come out with a loss. But that's not what financial advisers recommend average people do! You should be doing a daily cost average by setting aside a small portion of your income to invest, ideally in a tax-advantaged IRA (or 401k if your employer offers one.)

Thank you, but I prefer a savings account at my local credit union. I’m sure the interests will amount to something similar as what some random hedgefund manager can conjure by gaming the market.

If not, then I can live with it, knowing that what little interest I earned, at least it wasn’t earned by taking profits out of other workers. And in the best case scenario my savings got lent out to other members of my credit union that used it to buy homes or start businesses in my community.

With all due respect, savings accounts can barely keep up with inflation, if at all. The last couple of years it was not uncommon to have 15%+ gains with a diversified portfolio.

At today's interest rates it seems like you're probably going to lose a lot of money to inflation. At the very least why not buy government bonds?

Alternatively based on your posts it seems like maybe you would like investing in a ESG fund.

https://www.investopedia.com/terms/e/environmental-social-an...

You're going to have to explain how buying shares === workers earning less because I don't follow.

A simple index fund will outperform interest earned from a savings account by quite a bit.

Is there any particular reason to believe that financial advisors' advice for average people is in their best interest? (The average people that is)

Honest question, do you not have a 401(k) or similar? I certainly have a vested interest in seeing a healthy, sustainable stock market over the long term. Not because I'm part of the 1%, but because my upper-middle class retirement depends on it.

idk. It seems like a savings account could do the trick. You can save a healthy retirement by putting a portion of your salaries in a savings account in your local credit union.

As a bonus—while you are not using that money—other members of your credit union can use this savings in a form of a loan, to buy a home, start a business, etc.

The idea of my retirement being at the will of some hedgefund manager is not appealing next to the idea of my retirement being used temporary to help my neighbors buying a house or start a business.

> It seems like a savings account could do the trick. You can save a healthy retirement by putting a portion of your salaries in a savings account in your local credit union.

With interest rates as low as they are, savings accounts have a negative real return. The $1000 you save today would have substantially less purchasing power by the time you'd retire.

> As a bonus—while you are not using that money—other members of your credit union can use this savings in a form of a loan, to buy a home, start a business, etc.

Well, yes and no. Banks don't really directly lend out the money deposited in savings accounts, due to fractional reserve requirements.

> The idea of my retirement being at the will of some hedgefund manager is not appealing next to the idea of my retirement being used temporary to help my neighbors buying a house or start a business.

I don't get this. With an IRA or a personal taxed brokerage account, you aren't at the mercy of anyone: you can choose which companies & funds to invest in. Hedge funds are not the be-all-and-end-all of the stock market, most funds are mutual funds who invest conservatively. If you just mean that hedge funds can cause black swan events like what we're seeing with GME, then sure, that's a concern, but only for the short term. Long-term, the stock market tends to appreciate and substantially beat inflation. We can add regulations to prevent hedge funds from fucking things up, without tearing the entire system down.

Well in my ideal situation, the stock markets have already crashed and burned. My argument above is not that savings accounts are optimal for me personally, but that they are an alternative to the stock market. Better yet, an alternative which is far more worker friendly as they don’t rely on taking the profits from the workers and putting giving them to the shareholders.

You might be missing the issue here. A savings account will cost you money in the long term - ie. your purchase power will decrease every year because the interest paid on savings accounts does not even keep up with inflation.

The longer and more money you have in a savings account, the less purchase power you actually have. Think of this like putting $100 into the account but only being able to spend $90 of it. Multiply that by your life's savings... and this becomes a horrible way to save for retirement.

A Money Market account would be better, and nearly as safe as a savings account.

IRA's and 401(k) where you control you money is ideal. If you don't want to be bothered to pay attention to the markets... get yourself a managed IRA (yes, a fund would then be in control of your future). With a managed portfolio, you generally get some say over how your money is invested - so you could direct them to invest in industrializing economies (which would help lift people out of poverty over time). Just because you make money on the stock market doesn't mean someone is getting screwed over...

Bottom line is, a savings account will lose you money over time (and that doesn't even touch on the maximum amount you can have per account to be insured, which is far less than you'll need for retirement).

I think the parent is talking about an ideal situation in which saving accounts do actually pay off a nice interest that beats the inflation and sprinkle some extra profit on top. Not a lot but it is risk free. Isn’t the idea that banks make the money flow by circulating it around a good one? A saver who doesn’t need it now can park it in a bank and when their time to retire comes they get their actualized money plus some profit. And since the interest compounds, with a nice rate it could be both safe and profitable.

I agree that this is not feasible now but that is only becaus of the low interest. That dynamic would change if the interest is dialed up.

The only way a bank could afford to pay enough interest on a savings account to meet inflation would be to... wait for it... invest that money in something that would beat the inflation rate.

We've just re-invented the stock market.

No. That is not the only way... Alternatives include: charging more interest on loans then on savings, charging service fees for each transaction. Also just think about this for a second. If the economy keeps growing (which is what inflation really is) more people will have more money, they would want to keep that money somewhere. They put it in a savings account. The bank now has more money to pay more interests.

We don’t need the stock market.

> You can save a healthy retirement by putting a portion of your salaries in a savings account in your local credit union.

You must be joking. My credit union is offering .1% on savings, and it’s not like they’re some extreme outlier, rates are incredibly low across the board. You are actively harming your future by doing this, you aren’t even keeping up with inflation!

No I’m not joking, nor am I harming my future. I don’t have to make an optimal amount of growth on my savings to afford my retirement. There is no harm in owning less money then if I had used them to swindle more workers out of their profits on the open markets. In fact, every dollar you make as a result of not working is a dollar somebody else worked for and didn’t get. You are harming workers by earning money on the stock markets.

You do understand where the "interest" comes from on your savings account right? The bank doesn't just invent it...

And largely speaking, when you make money on the stock market it comes from a multitude of sources, including the hedge funds you seem to despise.

Not to mention, just because you made a profit on the market doesn't mean someone was screwed over. The stock is worth whatever it's worth when you sold it. It's an open market...

You do seem to have some fundamentals about the stock market, savings account, and finance a little mixed up.

idk. I simply don’t like the fact that people are gambling with my workplace. And I especially don’t like it when shareholders pocket parts of the profit that I made them without bringing anything of value to the company.

I don’t despise hedge funds any more then I despise the stock market as a whole. We don’t need it. In fact I would argue that the existence of the stock market is actively harmful. I would go so far as stating the stock market is partially to blame for the current climate crisis. That is, if it wasn’t for the stock market, perhaps people would have acted sooner and prevented the climate emergency.

But fundamentally the stuck market is an idiotic idea. If we didn’t have stock markets, and someone pitch the idea of the first stock market here on HN, I don’t see how any businesses would subject them self to being bought and sold like that.

"And I especially don’t like it when shareholders pocket parts of the profit that I made them without bringing anything of value to the company."

Are you trolling? You do realize why those shares are out there, right? Because your company needed money, and those people gave your company their money to get started, grow, hire more people, etc. Is that not bringing something of value?

IMO no. I would have preferred it if my company would have used less predatory means of getting that money, something like taking a loan or simply saving up part of the profits for any future investments.

The people that made the decision to sell the share still pay them selfs plenty of money, the shareholder’s reward is always coming from my paycheck, and I prefer it wouldn’t.

> And I especially don’t like it when shareholders pocket parts of the profit that I made them without bringing anything of value to the company.

> the shareholder’s reward is always coming from my paycheck, and I prefer it wouldn’t.

This is just untrue for nearly all public companies. Most companies do not pay dividends... and a stock price going up and being sold by some investor literally has nothing to do with your company.

In fact, the stock price is largely irrelevant to your company. It's only relevant to those who own the stock.

> I would have preferred it if my company would have used less predatory means of getting that money, something like taking a loan or simply saving up part of the profits for any future investments.

Issuing stock is basically a loan that they never have to pay back if they do not want to. They can always buy back their stock if they no longer feel it's worth while being a public company.

FWIW, publicly traded companies have earned far more everyday working people comfortable retirements and more, than any single privately-held company.

Every dollar you make in interest from your savings account at your credit union is $30 that someone had to pay the credit union in interest on their mortgage. You are swindling people out of their hard earned money — people who are struggling to own their home or business — to fund your own retirement.

Do you honestly believe that these are equivalent? Or are you just arguing in bad faith? I’m gonna assume the former and explain the difference.

The interest you are paying when you take out a loan is a) compensating the creditor for money lost because of inflation, and b) paying for a service. The bank/credit union at the same time will at the same time a) compensate for inflation and b) reward savings accounts for injecting money into the bank/credit union.

This is fundamentally different from shareholders buying stocks from a business siphoning parts of the profits from the workers to the shareholder.

People taking loans need the people that open the saving account, and get something of value (money they need). Workers don’t need the shareholders, and they get nothing in return (except lower salaries).

I’m sorry if I sound like I’m talking down to you. It is just that the different is so obvious I don’t know how to explain it differently.

It’s odd to me that you see the mutually beneficial transaction there but not in the stock market.

I will state this once as simply as I can: stock market investors are rewarded for funding companies by taking on that risk in hopes that the companies they invest in produce a profit. It is overwhelmingly similar to the process you are describing with your credit union, but in a much more distributed way.

> Workers don’t need the shareholders, and they get nothing in return (except lower salaries).

There would be no workers if companies didn’t have the capital the needed. So no, the workers very very much need the shareholders. The money has to come from somewhere. No bank is going to bankroll the next Airbnb, Uber, Instacart, DoorDash, etc.

Beyond that, the workers aren’t owed a penny more than they agreed to be paid. If public shareholders didn’t exist, the owners would have full ownership which is what happens with small businesses. Nowhere in these circumstances are workers any better off. Profits and losses are not their domain.

I’m sorry if I sound like I’m talking down to you. It is just that you are a victim of cognitive dissonance possibly due to your unconscious bias against wealth.

If I buy a stock of a company, how is that funding the company? Only the previous holder of the stock gets the money.

At some point, the previous holder of the stock was the company itself. That’s called an IPO. Additionally, companies frequently issue new shares to raise money. Tesla has done this multiple times in the past few years.

Most of the activity (all of it?) on the stock market seems unrelated to IPOs. Is there any particular reason stocks must be transferable?

Yes, it’s an incentive to encourage buying by reducing the commitment.

It does seem to have that effect. It also seems to have other effects. And it seems to be mostly other effects. If funding companies requires all those effects, it seems legitimate to question whether it's a net benefit.

I would take you more seriously if you spoke more concretely. What other effects, specifically? I’ll give you one: it distributes wealth by letting the common man invest in highly valuable companies rather than limiting it to just wealthy people profiting from entrepreneurship. I’ll bet you you and people like you wouldn’t be too happy if only the original founders of companies like Apple, Facebook, Google and their descendants owned those companies. Do you know how I know? Because Jeff Bezos owns just 11% of his own company and people still hate him despite that the other near 90% has made other people very wealthy too. Now imagine he owned 100% of it. That’s what you’re advocating for. If you think Jeffy boy would be more generous to his employees if he owned all of it, then you must not know the realities of most family owned businesses.

I’m not parent but I’m gonna chime in here and take this threat do yet another direction:

You have to ask your self, who are these people that have gotten extremely wealthy from Amazon? How did they contribute to generating that wealth? From where does the wealth come from that they are profiting from?

Now some of that wealth goes to hedge funds and workers see some of it in their 401(K) and what not. But if the alternative is that non of these people that invested in Amazon got extremely wealthy from it... They just got their investment’s worth and a little extra (like a proper loan would). And the wealth generated by Amazon would stay within the company, let’s be a little ideological here and imagine that this wealth would actually be used to pay workers what they deserve. Don’t you think the workers would get more from that deal, perhaps they could use that extra money to open up a saving account, perhaps they could pay it in social security.

Anyways I really don’t see in what possible world the existence of the stock market can benefit workers. It just does not seem to work out mathematically.

To use the Occam’s razor here... If you have to invent epicycles to explain your case, perhaps the simpler explanation is true. This stock market + 401(K) + hedgefuns + etc. seems to me just to be a bunch of epicycles, and money is actually simply being siphoned away from the value generated by the workers into rich folks that use the stock market for that endeavor.

I see two possibilities here:

a) The stock market is a predatory lending scheme

b) The stock market is a pyramid scheme

Either way the stock market should crash and burn

I don't think I'm advocating for anything. I don't know what all the effects of the stock market are, but it seems like it probably has some.

It's probably best you don't take me seriously. I don't have any strongly held opinions about any of it. Maybe I'll develop some, but I'm just trying to figure it out for now.

Shareholders and investors aren’t the only means of collecting revenue for a business. Alternatives include:

* Setting aside parts of the profit for future investment

* Getting a loan from a bank or your local credit union

* Community or owner funding

Do you honestly think that if it wasn’t for investors businesses would just stop existing? In a world without venture capitalists businesses would need to stand on their own merits, if it is not profitable it will go bankrupt. If it is a popular idea though, a competitor will find a better way of making it profitable, and share that profits with the owners and the workers (and not a shareholder because we don’t need them).

Arguably the existence of venture capitalist markets makes stupid unprofitable businesses out-compete better run businesses, simply by merit of being able to persuade investors.

> Setting aside parts of the profit for future investment

Companies go public without being profitable. Raising money via IPO is one step to becoming profitable.

> Getting a loan from a bank or your local credit union

No bank is going to loan $100M to a complicated startup with no collateral that needs capital to grow quickly and is unlikely to be able to start repaying for years. This is where VCs come in — they understand complex business models and invest as needed in exchange for equity.

> Community

This is regular investing. The people in your community are not more important than people living elsewhere. Everyone should have an equal opportunity to invest in promising businesses everywhere.

> Owner funding

Bootstrapping is already extremely common and accounts for most small businesses of which there are thousands and thousands. It’s not suitable for big businesses that make global impact. You can’t have a bootstrapped Google or Airbnb or Square.

Now I do think you are just trying to win an argument and not actually debating in good faith.

Community funding includes accelerators such as Y-combinator, wealthy philanthropists, and charities. Heck I didn’t mention it but you could crowdsource the money for all I care... Point is, alternatives exists that are less predatory then shareholders and investors.

> No bank is going to loan $100M to a complicated startup

(Since we are both just trying to win this argument) Perhaps startups that need $100M to get started, and are unable to crowdsource, loan, or community fund that amount simply should exist. Or at the very least, perhaps it should downscale to a more affordable price, earn some profits and scale up as the profits turn in. I’m not gonna cry for a hypothetical startup that failed because they couldn’t raise $100M before they even began the work.

> You can’t have a bootstrapped Google or Airbnb or Square.

So what? I see people complain about Google and AirBnB all the time on this very forum. These are massive companies that have shown predatory and monopolistic behavior time and time again. Maybe the business world would be better if we didn’t have any tech giants. And instead, smaller tech companies would have to collaborate on big scale projects. Remember that we got the CD by a collaboration.

> Now I do think you are just trying to win an argument and not actually debating in good faith.

You’re projecting.

> Y Combinator

You realize YC takes 7% of the equity and becomes a shareholder forever, right? This is exactly what you’re complaining about.

> you could crowdsource the money

If only there existed a system where anyone can fund any company at any time and then exchange hands when they wanted to fund another one... hmm...

I’m done here. You’re just trolling now.

I am not able rightly to apprehend the kind of confusion of ideas that could provoke such a comment.

If you make money on trades and then spend it on food, it certainly does seem like some kind of magic trick to me. Whatever money you earned must have been lost by someone else. Or does the amount of money increase when stocks go up?

Whatever the confusion is, I have it too.

I make something and sell it to you for $5.

Tomorrow, you sell it to a third person for $10.

Who lost money here?

Excellent question.

Really no one I think.

I'm definitely wrong about something though. I need to think about it some more to figure out what.

A new interpretation came to overnight, as if in a dream. I don't know what's correct, but here it goes.

You and the third person both lost money in some unknown combination. Either you're selling for a lower price, or 3rd is buying for a higher price, or probably both.

In the metaphor, this is aggregated across bazillions of transactions, and ignores benefits like supply and demand are generally evened out over time.

I think the question is flawed... Or at least irrelevant.

Since we are talking about the stock market (and stock brokers don’t make anything of value) a better question would be:

You hire a worker for $2 to make something you sell for $5. Someone buys it for $5 and sells it to a forth person for $10. Who lost money?

Now to make this simplification more accurate, there is a system in place for the $5 to $10 transaction called The stock market where there are bazillions of these transaction. Another question arises. Who is selling something for $5 when they could sell it straight to the forth person for %10? Who has is $10 and why are they paying $10 for it? How did they get that $10? Did they make something worth $10 and sold it for $10?

I think the real answer for who is loosing money is: Workers across the globe are.

Without the middleman it seems possible that some of the buyers and sellers never might have found each other. I don't know.

+1 for the Charles Babbage reference

It’s a pretty decent idea, at least in theory. Prior to stocks, it was difficult for the little guy to own a piece of a company. I certainly don’t have the money or time to get a stake of a private company, and I’m glad to be able to participate in the compounding machines that are well-managed companies.

I think your argument is better stated in that you don't see value from predatory capital vs sweat capital.

I can see the aversion to HF / VC. But you can't use that broad brush to paint all investment capital as predatory.

First, I can infer that your aversion to capital is due to vulture funds that have been known to extract money from perfect viable companies via buyouts (i.e. thinking "barbarians at the gates" type investments) for example.

However, the solution is not just to put everything in a savings account and disregard everything else is predatory.

How did we get here ? How did these funds come to exist ? Why are savers getting hurt and vultures making bank ? That's what you should really be questioning.

I think a much better argument can be made in that you would much rather increase interest rates, and stop the profilgate money lending by the fed, so that extremely cheap capital would not be available for these vultures to exist.

How do you back such scenario by direct action ? I don't know. However, i know you are not contributing to utopia by wasting your investment capital by letting it slowly burn in a savings account.