Reply #1: Protecting Investors [View All]

[NashVegas]

Marjorie Kelly makes a delightful argument in her book, The Divine Right of Capital.

According to Kelly, something like 99% of all stock purchases are for previously issued stock, the other 1% from freshly-issued stock for actual capital raising.

The 99% is not an investment in the company, it's an investment in the stock itself, used to prop up the previous stockholder's investment and the brokerage.

When you buy a used Explorer, you aren't investing in Ford, not one dime of the money you spend goes to Ford Motor company. It does not go to help Ford increase its factory output or profitability. And we don't expect the Explorer to inflate in value, we know it will deflate. All we ask is that it continue to run in such a manner that we aren't forced to invest an unreasonable additional amount to keep it running.

Unless you're buying newly issued stock, the market really is little more than a ponzi scheme. And it's the greatest ponzi scheme in the world.