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View Diary: Wealth Condensation: Why the Rich Get Richer (172 comments)

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  •  Um No (1+ / 0-)
    Recommended by:
    Josiah Bartlett
    But what do you think a stock purchase is?  It's just an investment in a later stage company.  But it is the same thing.

    The vast, vast majority of stock purchases are NOT new investment in a company ever sees a dime of it to invest in new idea, facilities, etc.  It only the tiny fraction of sales each day that are new issues that even have the potential to grow the economy.  The rest of it is just people moving existing shares around. It has some tiny beneficial effect by providing liquidity to the REAL new investment.....but most of it is even past what's needed for that.

    •  You really don't understand (0+ / 0-)

      Why do you think I made my angel investments?

      Because I'm a charity?  Because I expect a dividend stream?

      I made my angel investments in the hope that someone else in the future would buy my stock!

      Without the public markets my investments would lose most of their potential for an exit and I would not be interested in making them.

      For example, Google has never paid a dividend.  Without the ability to sell their stock the early investors would have no way to exit.  So why would they make the initial investment at all?

      The public markets are what make the initial investments that fund those companies worth making.

      •  You Totally, Totally Missed The Point (0+ / 0-)
        •  Except you are apparently totally unable to (0+ / 0-)

          articulate your point.

          •  I Think It Was Pretty Clear (0+ / 0-)

            You might try actually reading it. Summary:

            1.  You said that their was no real difference etween direct investment and stocks.

            2.  I pointed out one huge difference...namely that roughly 100% of the former is available to the business while way under 1% of the latter is.   (I also parenthetically pointed out that most of the latter at best supported liquidity, which has some indirect effect but still nowhere near 100%)

            3.  You made a rambling response about how liquidity. While totally ignoring the main point which was the rebuttal of your incorrect original statement equating the two.

            And with that I'm don't seem capable of or interested in holding a rational discussion on the topic.  Have a nice day.

            •  Sigh... so you still don't get it (0+ / 0-)

              There's no point in direct investment unless there is a liquid aftermarket.

              That's why venture funded firms go public.

              Without the aftermarket there is no direct investment.

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