/lit/ - Literature

I get how the stock market works for the most part but I still don't understand how money can just poof out of thin air like that. It always struck me how amazing and a little insulting it is for someone with a lot of money to just press a button to buy stocks, and then have those stocks jump massively, sell them off and have x times as much money. If it's that easy, it really feels as though there really is a peasant underclass who toils and sweats and worries about making rent for purely arbitrary reasons.

I know real investing takes real work and lots of planning and strategy goes into making big plays. Still the effort invested is completely disproportionate to the reward.

The whole original idea of a stock is to own a portion of a corporation. In theory it's supposed to reflect the company's earning potential, based on all kinds of discredited mumbo-jumbo about the Invisible Hand of the market magically computing the company's approximate value through spontaneous order as per Hayek . And perhaps this is true in a sane market system where the real economy is put first and financialization second. It is increasingly clear that nobody cares about the earnings potential of the company. Speculation used to be this thing that was looked down upon but now it is seen as the thing that badasses do to make obscene amounts of money overnight. It just underscores how disconnected from reality the stock market has become.