TED Conversations

Daniel Boyd

This conversation is closed.

It should be illegal to sell shares within 3 years of buying them

Once upon a time, shares were invented as a way for companies to generate capital for investment. The investor provided the capital to benefit from the profits that were generated on the basis of this investment. Turning investment into profit takes time.

Today, shares are bought and sold in microsecond transactions that purely aim to cash in on the largely random fluctuations that are generated by the trading system itself. Investors (and traders) earn money not through what their capital enables, but by their ability to second guess these self induced fluctuations. Immense amounts of money are tapped out of the system in this way without performing any service to society or industry.

As if that weren't bad enough, we now have a financial market flooded with derivatives and other constructions that are even further removed from any relation with investment and productivity.

Because society still needs money as a tool in the real economy, it has become enslaved to the financial markets, rather than the financial markets servicing society.

It's time to put and end to this parasitism, and the solution is simple. Make it illegal to sell shares within 3 years of buying them. This would ensure that investors provide capital on the basis of reasoned confidence in the future of their investment, and profit only from this return.


Showing single comment thread. View the full conversation.

  • thumb
    Sep 27 2013: in short, we should make illegal all the things that we don't understand.

    does that apply to modern physics?
    • Sep 27 2013: That was cruel.
      But cruel.
      I suppress laughter while trying to look disapproving.
    • thumb
      Sep 27 2013: A curious response, particularly the reference to modern physics, which we actually understand fairly well and is not subject to human laws, so it would be pretty pointless.

      I assume that you're trying to imply that my objection to the way the stock exchanges work is based on ignorance. Certainly I'm no expert. But I don't think you need to be to see that financial markets have become self serving. Apparently you disagree?
      • thumb
        Sep 27 2013: you again say "we understand". some people do, others don't. most don't. few do. why would we ban things based on that? people risk their own money. so even if it makes no sense, you have no right to interfere. but in fact the stock exchange, among a huge quantity of noise, do useful things. it prices stocks according to the traders' anticipation on the company's worth. and we should assume that in the long run, there is a correlation between traders' anticipation and reality.
    • thumb
      Sep 27 2013: Please elaborate in short sentences and clear words what in your view is wrong in Daniels statement and what makes you think, that your understanding is superior.

      Don't use any external references, links, books or such alike.

      If you can't do that within 2000 characters, your claim is insignificant and noticed as 'trolling'.

      And what got physics to do with economics? If you like to explain this as well, open another reply in case you need all of the 2000 characters for the first part.

Showing single comment thread. View the full conversation.