Hi Jan,
Jan Matthieu wrote:
>
> How many investors are nowadays buying (and holding on to) stocks for the
> dividends they produce? Nowadays stocks are bought primarily because their
> value is expected to rise.
In my outline & essay on this subject I exclude direct investment in
equity markets. They are growth facilators, and are not a zero sum game.
I agree that the motivation is capital appreciation, not dividends;
however much of the money invested stays long term in retirement
accounts, mutual funds, and pension funds. This has always been called
'investment' rather than speculation. I also agree that the pricing of
the US equity market in general is ridiculously high, perhaps 300%. When
savings are needed for emergencies and necessities (next bad recession),
a serious bear market is likely in my opinion.
(snip)
> Then how do you account for that? Hardly a zero sum game.
I think I explained this above.
> The fact is you are calling speculators only a certain type of short term
> high risk speculators, while actually practically the whole market is
> speculating.
As far as % of all capital committed long term vs short term (few
weeks-months), I don't think you are correct. However the prices make it
seem like all speculation.
There is little savings in bank accounts these days; wait till the money
is needed. Recall the 80s when the Japanese economy was king of the
hill; in '89 the Nikki Dow was 39,000, real estate prices in Tokyo were
astronomical, and a canteloupe was US$40. Then their economy collapsed.
The Nikki has rallied this year from 14,000 to 16,000! Y2K may begin the
end of the US mania.
> >A lesser gain is not the same as an outright loss. It is more akin to an
> >'opportunity loss'.
>
> Wasn't that one of the things transnational companies wanted to be refunded
> for in the MAI propositions?
Probably! Rational corporate executives will try to maximize profits &
externalize costs. I'm not supporting the system or its main players -
the superrich 400. But humans will seek security (as Thomas Lunde
said)in whichever way they think it is most readily available. They are
currently deluded into buying overvalued stocks. I don't blame Joe &
Jane public; they don't know they are setting themselves up for a
fall.
Steve
