A question that continues to pop into my head ever since a few years ago and even more so since this stimulus plan was put into effect. It’s not really a question but a statement; why the stock market shouldn’t exist. You may be saying what on earth is this person talking about, keep reading and I will explain.
It all started when the markets around the world began to collapse a few years back in the year 2006 to 2007. Based on the events that outlined the collapse many stocks and companies plummeted to a record low numbers all based on consumer confidence. Consumer confidence drive stocks up. This means that if the media, the people and the spending of that company is good or acceptable than the stock price will remain average or greater. It is not based on profits, growth or other values.
If a media company wanted to they can simply dictate and promote a stock or a brand to a vast quantity of people and be able to get the stock price up. The reason that this is so important is because this stock system seems to rely on those factors rather.
Another problem with the stock market is shareholders. Companies always need to impress the shareholders. Companies are forced by shareholders to continue growing and making more profit eventually he will be a point in time when companies cannot continue to grow they will stop it is just impossible for these companies to continue growth. How is it impossible? It is impossible because there is only so many resources that the company can compete for and that is money and people eventually you’ll max out the people that are going to buy your product or services and that is how you will cap out the market. This is how shareholders kill public companies. A shareholder who hate the particular company or just outright as his own corporation even a private one can invest money into a company and sell at their own discretion at any point in time. Short selling is a prime example of how detrimental these acts can be.
In short if the stock market did not exist companies could no longer compete against themselves they will be able to focus more on their own and as a result will be more stable company. Shareholders bring many instabilities companies as they are always trying to make money on their investment which makes sense but in reality these people were trying to make money too fast. The market today is not stable and it has not been for the last 100+ years before. I feel that if companies want to become public they should not be burdened by what the shareholders have to say or what they want.
