Re:How We Value the Super-Rich - Wall Street vs. Silicon Valley
by gaius on Monday September 29, 2008 @06:49AM
(#318255)
Yes and no. The price of AAPL is whatever people are willing to pay for it. AAPL is effectively a currency; Apple can use it to acquire other companies. Without an active secondary market, stock can't play this role at all.
Re:How We Value the Super-Rich - Wall Street vs. Silicon Valley
by asdf333 on Monday September 29, 2008 @12:09PM
(#318455)
Sure. I am not saying we shouldn't have a secondary market.
I am saying: "Hey if professional traders did not exist, the markets may be a bit slower but it'll still work."
So yes, they provide liquidity but...at least in today's markets the CDO traders are not doing their job on the liquidity front! :)
When people trade AAPL, for example, there is a loser and a winner. The real value is not created by those trading AAPL it is created by Steve Jobs and those working at AAPL. While trading is not zero-sum, it is a mostly zero-sum activity.
You might say. AIG may beg to differ, since it went under for liquidity, rather than solvency reasons. However if you don't employ dangerous amounts of leverage, it is not an issue. There are plenty of insurance companies in business who didn't dance too close to the edge like AIG did.