• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

The stock market as an example of 'free markets'.

Torus34

Torus34

DP Veteran
Joined
May 5, 2019
Messages
9,690
Reaction score
4,663
Location
Staten Island, NY USA
Gender
Male
Political Leaning
Other
Much has been written about markets. Extreme positions range from markets as casinos to markets as true reflections of the evaluation of available facts, resulting in accurate evaluations of the worth of, say, stocks. The US stock market, reflected in such indices as the Dow Jones Industrial and the Standard and Poor's 500, has shown a remarkable resistance to the 'fact' of the Covid-19 pandemic and its effect on the world of business. [Ref: Any chart of the DJIA or S&P's indices, not to mention such 'derivatives' as the DJIA p/e/ratio.]

How can this be reconciled with the extremes given above? That thought has interested me of late. I believe I've discovered a rational middle ground.

There is a huge amount of information available to investors. Once we've set insider trading aside, roughly the same information is available to all. This, though, does not mean that each investor weights each fact in the same way. That, I believe, is the key. There's a Zeitgeist, if you please, that causes many investors to skew the weighting of the available facts. This, in turn, can result in the stock market improperly reflecting the actual state of business.

Comments?

Regards, stay safe 'n well. Remember the Big 3: masks, hand washing and physical distancing.
 
The stock market is rarely rational.
 
Stock market is hardly free or rational and to easily manipulated by the big boys or influential politicians... Yes Trump.

Sent from my JSN-L21 using Tapatalk
 
Capitalism is beautiful until you work for a penny and you are ruined by taxes, until you close your business and you are evicted on the street, until you die without medication and you are sent to the oven. It is fine, as long as you personally are not in danger. But the queue is moving.
 
The term 'free market' is something of an ideal. In practice, there are restrictions on markets. There are many good areas for discussion on just what controls should be placed on a market. The underlying intellectual framework behind the restrictions is also of interest.

Regards, stay safe 'n well.

Reminder: I try to respond to all posts that quote mine. If I don't respond to your post, it may be that you've managed to make it to my 'ignore' list.
 
The "sanctity" of private property ends where it intersects the interests of other, larger private property.
 
You must log in or register to reply here.
Back
Top Bottom