It would appear that our Stock Market exchanges have morphed into Casinos.
The original concept of financing businesses via share capital from non associated people who in return for the risk they undertook would receive dividends on an annual basis (if they were lucky) and would share in the increasing value of the company ( if that is what happened ). Original investors took into account the product made or service offered relative to what else was available in the general market place at that time. They also rated the qualities of the management team and their performance history.
Fairly basic stuff and easy to understand. If the company performed well then you rewards came via dividends or when you sold your shares. The lucky ones enjoyed both.
From this humble beginning we now have today people who really don’t give a dam whether the company goes forwards or backwards as long as the shares move one way or the other. Through the use of sophisticated computers and financial instruments these people are capable of making or breaking a company in the short term and what’s more they don’t care as long as they make money. The companies are only vehicles for their exploitation so perhaps it is time for companies to find a more secure way of obtaining the necessary finance to run and expand their enterprises then this other group can go to a casino and apply their skills. It would not surprise me if they were fitted with concrete boots in a very quick time and launched into some part of a deep liquid. Casinos would not put up with these tactics but our governments do though lack of knowledge and reliance on contributions to election budgets. The only mugs in this game are the small investors who have been informed this is the best way to invest their savings by another group of money gouges who quote them the return before their fees come out. This group are squealing like stuck pigs as the government tries to make it clear for all to see just how much and how often they feed off this gravy train without any great effort or guarantee of success. Many struggle to match the index particularly after their fees have been removed.
If we are capable of accommodating Islamic monetary restrictions surely we could devise a system where company shares could only be traded through government agencies in each country and where all these new instruments were banned. Then the only people interested in investing would once again be those who wanted the companies to prosper, create jobs and grow. Their rewards would once again be via dividends and/or the increasing value of the company and its ability to generate income.
The big investors would ultimately return to this new market because where else can they place their billions surely not in the back garden in a tine can. We had 1929 and we now have had 2007/8 and still the regulators appear to just play with the fringes. Maybe Europe led by Germany will at least try to direct the funds back to the basics of supporting industries rather than just use them as some giant markers at a world wide Casino.
KME
