this post was submitted on 28 Oct 2024
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Bruh, wtf you think stock trading is? Buying into funds is just hiring professional gamblers to work for you, "insider trading* is cheating and dark pools is just the high rollers table.
In gambling, the house always wins, by extracting value from the players. In stock trading, the players (capitalists) collectively always win, by extracting value from labor, technological growth, and natural resources. These are not the same picture.
Sure, you can take on as much risk as you like using derivatives, and emulate a gambler using the stock market as a source of randomness (volatility). But that's not how most traders behave, and it's not how most traders' payoffs work.
the end result is very much the same
Damn, I’m up over 100% since I downloaded it seven years ago. Thank you, ETFs and tech companies I dig!
Same, looks like I'm not part of that 90% either, only 4 years account age here.
Heady!
Nice story, bro.
I'm also up, more years, not Robinhood.
Then you glance over to Wallstreet Bets, they are the direct opposite on the curve.
Yet still almost everyone loses money on exchanges, for various reasons which I don't want to spend time writing up.
But market has been irrational for many years, with no signals of slowing down.
I mean, I feel most people who lost money were doing "options trading", basically full on gambling/speculation. If you had put that money in an s&p500 index fund, chances of losing money are slim.
Thats... what Robinhood doesn't advertise, and (at least used to) always buys options by default.
So fuck Robinhood.
Where is the app that has only one button 'Buy ESG'?
Excellent analogy. People who equate the stock market and gambling should go look up where the DJIA stood in October 1994. The slot machines in Vegas don't magically start spitting out profit just because you're patient, but stocks generally do over time.
It is gambling, because dark pools. That is the house. You're not trading the actual stock. The financial institutions do that. You buy stock from them, and they in turn give you a fake number and invest it in all secrecy.
In essence, you'll get your money, but they will handle the profits. So it is a rigged slot machine.
Please go look up the Dow as of October 1994.
Thank you.
No.
Please read my original post again. Did I say "was and always has been" or did I say "is"?
Not all gambling requires a casino/house.
Even in a home poker game, it is not possible for all the players to go home having made a profit, whereas that is very possible in the stock market due to growth, labor, and natural resources.
(The coal miner who gets a wage and black lung is not a player in the stock market. Neither is the sun, which provides free energy to agribusiness.)
Yes, general investing is not zero sum, however many methods of advanced trading are. Options trading, which is prominent and easy to access on Robinhood, is much closer to gambling (and is treated that way by many users) and is zero sum.
Most active trading strategies require successfully arbitraging, or extracting inefficiencies out of the market, and you can't do either of those things without someone else losing money.
Passive investment is investing in the companies that underlay the market, active trading is extracting value out of the market itself.
Stock prices at least have the possibility of being based on something substantial other than dice rolls. Derivatives, not so sure.
It's damn near a roll of the dice of what is going to come out of a CEOs mouth during an earnings call..
"Possibility" but not an "actuality" since share prices are typically based on the feelings of major investors and not necessarily what's actually happening within a company.
Having a diversified portfolio has a positive expected return. Gambling has a negative expected return. There's a long history of stock investing resulting in positive average returns, and there's a long history of slots resulting in negative average returns.
If you're buying good companies (or buying an index) and holding long-term, you are expected to get positive returns, therefore it's not gambling. Any investment can have a negative return, it's the mathematical expectation that separates it from gambling.
People aren't using Robinhood to invest in index funds via their 401k, they're using it to "day trade" which is just gambling. Nobody is saying that investing = gambling, they're saying that buying and selling shares or options in a single company in order to time the market = gambling.
How long does an asset need a history of positive returns before it's no longer "gambling"? Hypothetically, would 15 years be enough?
It's possible for the stock market only to grow because it externalizes costs (environmental damage, health of workers, etc.), and if that's the case, we need to see if society is actually proceeding in a positive direction as a whole (I generally believe this to be the case), but consider for a moment that the economic windfall experienced by many western nations was (and still is in many ways, think banana plantations) largely made possible by the subjugation of imperialized nations. In this case, was the economic windfall experienced by the imperial powers and their trade partners actually a good for society as a tide that rose all boats, or not?
If we fail to consider the biggest losers of the stock market, those that cannot even necessarily participate, it becomes much closer to gambling at the very least. I'm not here to have an argument about whether or not capitalism and the stock market and such things are actually good or bad for society as a whole, just that it's easy to ignore the biggest losers of the system by virtue of the fact that they don't necessarily even invest in the first place. In this case, the universe is the casino, and humanity are the gamblers, as compared to just the stock market being the casino and the investors the gamblers.
Not that your comment is wrong necessarily just that there's more ways of thinking about it.