Everyone is a Day-Trader

02002-09-19 | Uncategorized | 0 comments

I was thinking about the stockmarket the other day.
The concept of selling shares of a company originated with the need to raise capital for research and development or expansion. Otherwise one would do like Dr. Bose who still owns 100% of BOSE and who has to answer to no one.

Over the last two decades the stockmarket has become a reality for everyone in America. People buy and sell shares over the internet. Many people love the thrill of day-trading and I have heard of many a roadie trading stocks on his wireless laptop while rushing to the next gig on a tourbus. This opportunity leads to the attitude that it doesn’t matter what I trade as long as I make money. In other words damn the consequences. Or – if it looks like the stock of Napalm Inc. is going up I will buy shares so I can make $$$.

Traders don’t care for a company itself, the well-being of their employees, their ideas, the research and goals. Instead all that matters is: will the stock rise or fall. That naturally makes the company look to the next quarter instead of the next decade. It makes companies do silly things, like hobble the bus of a computer so that a few months down the road they can sell the same computer again – without the hobble as a new achievement……It makes our corporate world incredibly short sighted. How many companies nowadays would rather fire a few thousand people to make their short term goals (in which case the executives still get their performance pay) than try to make it through a slump or come up with a better long-range plan?

Executives/presidents/CEOs have performance-oriented contracts, which means they want to please the stockholders NOW. That makes it harder to spend money on research and development.

I believe our economic climate reflects the social climate and also the political climate. Politicians now seem to start working on their re-election the moment that they are elected. The old rule of thumb was that politicians would start thinking about re-election after half of their term, which meant that they might support less popular causes that were nonetheless positive and maybe necessary in the long run.

The nineties are over, and I would like to move on…..


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