[Homestead] The Piggy Bank is empty, Wall Street reacts

Gene GeRue genegerue at ruralize.com
Sat Sep 25 10:14:35 EDT 2004


Two of our resident financial mavens:

>>So Wall Street reacting to an empty Piggy Bank is unconvincing, Wall
>>Street's piggy bank never had any actual coins to shake out on demand, it
>>has been empty all along.

>>---you got that right, James---it's all an illusion---

Good grief guys. Can't tell if you are serious or just having fun. There 
are impressionable people here.

Public companies raise capital by selling their stock. Some of that capital 
is used to buy machinery, some for R&D, some is used to perk the top dogs. 
Some companies are managed well and return a profit to their stockholders. 
Some lose. That is life at all levels. There are stock market gamblers, 
including day traders, who operate much along the lines of Las Vegas 
gamblers, except the stock market house takes a smaller cut.

I have always preferred real estate over stocks and am only mildly 
knowledgeable of how the stock market and monetary system work. Chris's 
401k is invested in mutual funds managed by a large company, and she forces 
me to manage that account, so I have to know the stock market a bit. I 
don't like the short term fluctuations but have confidence in it long term. 
There are responsible and irresponsible managers in all fields. Trillions 
of American and foreign dollars are invested in American companies, and 
people who consider themselves very important and very rich make damn sure 
their investments are safe and continue to increase in value. Lots of money 
is made and lots more is lost, the latter usually through impatience and 
greed. Long-term stock market investment returns an average above 
inflation. I still like real estate better, not in the least because I am 
much more knowledgeable about it, but mostly because the product is 
becoming more scarce and the demand is rising. Until the computer 
revolution nearly all great wealth was founded and held in real estate. If 
Wall Street burns to the ground, the ground will still be there.





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