Quote:
|
Originally Posted by Nefeli
the stock market isnt the economy, but it is a part of it and it is related to it.
the prices of the stocks in theory, should reflect how investors see the prospects of a company. with fundamental analysis, rations, stock evaluation, investors should be able to make a comparison of the real value of the stock and the price in the market and then decide how the future of the stock would be and act relatively.
it is a part of the economy, because when the company first issues the stocks and the public becomes shareholders, with the money it takes it uses it for growth, investements etc, which leads to more jobs, more consuming, more growth of the economy etc.
(a similar role that banks should have when they give loans to companies).
the same goes with the annual profits. distributing them between dividents and investments. people getting "richer", the consume more-->economy growth.
now all that is in theory. corruption and greed arent being taught in schools.
companies give false financial data, use the money they get to buy jets or whatever instead of investing, stock analysis is mainly marketing, banks give loans that are risky, investors are being lied to, but also dont look beyond their greed and ignore the facts.
sidenote-im not saying that there arent good analysts out there or that all companies are corrupted.
badass auditing and risk management is what could prevent investors from being fooled, banks etc from giving bad loans or make investements that are of high risk. i mean they will make the high risk investments but they will distribute the risk.
|
the facts are that corporations have a board that is supposed to oversee their actions, and make sure that the governing party of any corporation is doing what is in the best interest of the company and shareholders. with the de-regulation philosophy of greenspan these boards had no oversight and became pure rubber stamp asholes as long as they got their $$$$$.
that way the leaders of these corporations had free rein to be as corrupt as possible.