How do we start to care about quality, building lasting things, fundamentals? What would happen if we taxed capital gains at 100% for the first, I don't know, 3 / 6 / 9 months of holding an asset? Maybe investors would have more incentive to care about fundamentals?

Anyway, I assume I'm wrong about all of this, just looking for someone to explain why. ;-)

Which companies? Because the net income and profit margin trends for the most highly valued companies have been the highest in history, for many years now.

All I'm saying is that I wish our economic system were set up such that people with the mental aptitude to work at a place like Jane Street could earn commensurate salaries for applying that aptitude towards problems with much greater positive externalities than proprietary trading. Alas, it is not so.

Maybe humanity can start paying them decent money first?

It's another level detached from real value

I think it would be good if our best minds went to work on directly creating better things instead of indirectly moving money around efficiently so that other people might eventually find success.

Capital has to get from savers to builders. Liquidity, tighter spreads, and efficient pricing lower the cost of capital for all projects, including the ones building better solar panels. If financing those projects is cheaper and faster because markets function well, more of them get done.

It’s easy to glorify the visible widget (solar panels) and discount the invisible infrastructure (capital markets), but the latter is what makes scaling the former possible. The system needs both.

In the first case, money is important (if you completely ignore it, you can’t deliver value sustainably), but in a perfect world it should be more like fuel and an indicator that you are doing something right.

Same with farming. “Amortize the cost” only works if margins and credit markets allow it. A small farmer facing price volatility, weather risk, and thin margins doesn’t have the same access to capital markets as a Fortune 500 manufacturer.

The whole point of efficient markets is to reduce those frictions, to better allocate risk and capital so that good projects (whether in manufacturing or farming) don’t just work “in theory.”

For me, no better system exists in the world. It’s not perfect but until there is something that works better I will have the agree with it.

Exactly what I am lamenting in my original comment. Investors chase returns, i.e. money for its sake.

As long as that is conceptually a thing, it is a no-brainer to fund a bad company if you are sure its shares will go up in price during the term of your investment; it is also in your interest (and acceptable within the “money for its own sake” framework) to ensure its shares do go up by helping hype it up; etc.

This all, I believe, is a source of strong and far-reaching negative externalities, which I am far from sure are trumped by its potential benefits.

> A small farmer facing price volatility, weather risk, and thin margins doesn’t have the same access to capital

Why do you need access to capital in order to price in the risks or the cost of relevant insurance? (That’s what I meant by amortising, I might have used a wrong term.)

Why are you “facing thin margins” like it is not an open market where you set your prices and your margin is your choice?

On farming: margins aren’t simply “a choice.” Prices are set in global commodity markets, not by a farmer unilaterally. Thin margins are structural, and access to capital or insurance is exactly what helps them survive volatility rather than get wiped out.

I am not sure why you think farmers get to set price on a commodity item. They don’t and because of that will often leverage future contracts or other hedges to bake in prices early.

I think it’s up to every participant’s discipline and that’s fair enough. If one sets prices in too much, another local farmer will sell more. If another local farmer undercuts on price, they’ll suffer more when times are tough and weather is bad.

> more capital scarcity

If there is a lot of capital knowingly feeding ethically problematic and/or incompetent companies due to an expectation of return (and then ensuring that return by promoting those companies), then less capital is absolutely better.

Regarding the rest of your comment, I’m not as advanced in this subject, so to me you seem to only list more issues with the system as is.

At the end of the day I believe that if CS/finance was not "cool" and paid the way it does (specially at the level of HFT) most of those kids currently there would go back to the good old law/medicine...