Stocks & Trading

[Gunnersaurus]

I think research has shown the stock market creates poverty and other issues as companies always have to create maximun profit to keep share holders happy. If they didn't perhaps they could be more ethical. However to change it you would have to have an alternative. What that is I have no idea.

[Dr. Gonzo]

6 minutes ago, Gunnersaurus said:

I think research has shown the stock market creates poverty and other issues as companies always have to create maximun profit to keep share holders happy. If they didn't perhaps they could be more ethical. However to change it you would have to have an alternative. What that is I have no idea.

I think that's a big oversimplification. The stock market doesn't create poverty through what you've just described - because even if companies weren't publicly traded, they'd still owe the same fiduciary duties that are owed to shareholders now to their shareholders. You don't need to be a publicly traded company to have shareholders...

You can argue that greed coupled with these fiduciary duties can create poverty, when companies have massive profits and then take that windfall and buy up more of their own stock to inflate the price of the stock for their shareholders - rather than invest that money into the workers that keep that company running... that's bad for the workers but good for anyone who has an ownership stake in the company. But it's not really the stock market causing that, is it? Because those duties would still exist if there were no stock market, at least under UK corporate law I believe @Inverted probably knows better than I do.

A strong stock market typically creates more wealth inequality because richer people are more likely to own more stock (or own stocks in general). And in times when the market is shit, especially in times like these where there's cost of living crises around the world... yeah, if you don't have the extra money to spend on buying stocks that are likely going to keep dipping in the foreseeable future while the economy is taking a shit... you're not going to be able to reap the benefits of buying in a down market as much as people who aren't anywhere near as affected.

I think it's easy to conflate the stock market with greed because we're talking about massive corporations and companies - those are basically synonymous with greed. And we're talking about the finance industry, which is greedy and generally corrupt. And the stock market definitely gives an advantage to the wealthy over the non-wealthy because... well it's all about money, isn't it... and they've got more money to fuck around with in the stock market.

But at the same time, trading stocks has never been more accessible to people generally - so it's not just "a game for the rich." They've got the upper hand sure, especially in a cost of living crisis. Especially over the people who are living pay period to pay period, so they can't even build up a savings... let alone funds for investing... but if you're able to build up even a bit of savings in tough economic times and haven't thought about investing while the market is generally bad... I think it's a mistake to not learn about investing and trying to make that money grow over time. The internet has proven to be a great leveler at getting the non-elite into investing.

There's also a lot of shareholders that are inclined to care about ethics, to the point where there's no a metric that people grade companies based on their ESG (environmental, social & governance) scores - which is mostly based off sustainability and ethics. Other than that, I think what could be done is the laws could change that would mean corporations need to have an ethical duty to society as well as to their shareholders.

But that also seems difficult to really enforce, so I have no idea how that would work out.

[Gunnersaurus]

@Dr. Gonzo To be honest I don't really have any clue about it. I was just mentioning something that I read or watched somewhere. Like most things these things need to be researched properly to determine if they have a overall positive or negative effect. What I think doesn't really matter. 

[Devil-Dick Willie]

Oil futures created poverty for sure, but publicly trading stocks doesn't I don't think, just as @Dr. Gonzo says, it does create wealth inequality. 

[Gunnersaurus]

3 minutes ago, Devil-Dick Willie said:

Oil futures created poverty for sure, but publicly trading stocks doesn't I don't think, just as @Dr. Gonzo says, it does create wealth inequality. 

I have looked into wealth inequality befire. Need to look into it more to undertand it. One of the things I don't understand is people on low wages that they can't live of when some people are making billions.  Could these people be payed more and these people still be very wealthy and these companies still function? If that's true then you get a very good argument for these people to pay a large amount of tax and using that money to help those people. 

However only X amount of money is used for profit. Most is used for costs. Amazon for example have over 1 million employees. If you take the profit they make which is in the billions. If they were to take less could they pay there staff more or doesn't it work that way? 

This question if for @Dr. Gonzo as well

[Devil-Dick Willie]

9 minutes ago, Gunnersaurus said:

I have looked into wealth inequality befire. Need to look into it more to undertand it. One of the things I don't understand is people on low wages that they can't live of when some people are making billions.  Could these people be payed more and these people still be very wealthy and these companies still function? If that's true then you get a very good argument for these people to pay a large amount of tax and using that money to help those people. 

However only X amount of money is used for profit. Most is used for costs. Amazon for example have over 1 million employees. If you take the profit they make which is in the billions. If they were to take less could they pay there staff more or doesn't it work that way? 

This question if for @Dr. Gonzo as well

Profit is taxed. So if you pay your staff more then (theoretically) you'd be taxed less. Unfortunately multinationals tend to pay no taxes.

Wealth inequality at our level of society looks more like 1 working class family who rent their whole lives, or can only afford to own their home after a 30 year mortgage, who then sell it to put themselves into a nursing home, vs a couple who earn only 1.5 x what that working class family owns, being able to afford a 15-20 year mortgage, using equity on the home to get another, and affording in home care or selling 1 house and having another left over for the kids at their end of life stage. This is the disappearance of the middle class, as society divides into haves vs have nots.

[Gunnersaurus]

32 minutes ago, Devil-Dick Willie said:

Profit is taxed. So if you pay your staff more then (theoretically) you'd be taxed less. Unfortunately multinationals tend to pay no taxes.

Wealth inequality at our level of society looks more like 1 working class family who rent their whole lives, or can only afford to own their home after a 30 year mortgage, who then sell it to put themselves into a nursing home, vs a couple who earn only 1.5 x what that working class family owns, being able to afford a 15-20 year mortgage, using equity on the home to get another, and affording in home care or selling 1 house and having another left over for the kids at their end of life stage. This is the disappearance of the middle class, as society divides into haves vs have nots.

I'll come back to your other point later. I want to go though one point at a time. Wealth inequality isn't necessarily morally wrong in my opinion. I mean if somebody contributes more they deserve more money. The issue for me is unfair wealth distribution. Especially the sort that causes poverty. This can happen for many reasons. Somebody who grows up with wealthy parents has an advantage over someone who doesn't. 

But I want to discuss the point I made.  Could these massive companies that make billions pay all their staff a wage that keeps them out of poverty? Obviously bare in mind that it may be that only the ones at the bottom may be on that poor wage. Many of them in higher positions may be on wages that keep them above the poverty line. 

Bare in mind supply and demand and ethics can be different. Paying somebody what the market determines when you could pay them more and keep them out of poverty could still be seen as wrong depending on how you view it.

[Dr. Gonzo]

1 hour ago, Devil-Dick Willie said:

Profit is taxed. So if you pay your staff more then (theoretically) you'd be taxed less. Unfortunately multinationals tend to pay no taxes.

Well also if you're the officer of a big company, there's a good chance you've got a lot of stock in the company you're working at. So if you make the decision to pay workers more or have the company participate in a share buyback, to purchase issued shares & bring the value of the company up, then your net worth goes up a shitload... and it's not taxable because you haven't realised those gains yet. And if you've held onto them for long enough, when you sell them you end up paying less tax on them as opposed to if that money was ordinary income.

So from an officers/directors standpoint, imo it often times comes down to a "what's best for the company" vs. "what's best for me as a large shareholder"... so greed.

35 minutes ago, Gunnersaurus said:

Wealth inequality isn't necessarily morally wrong in my opinion. I mean if somebody contributes more they deserve more money. The issue for me is unfair wealth distribution

Unfair wealth distribution is at the heart of wealth inequality, tbh. You can't really separate the two too much. It's one thing to say "if you contribute more, you deserve more" - but let's be honest, it's not proportional to how much anybody contributes to society. Nor is the amount they contribute back to society, a society that's made them fabulously wealthy, proportional. The greater the wealth gap, you end up with more people in poverty with less means to work their way out of poverty.

I'm still not sure it's the stock market's "fault" that it wealth inequality grows when the market is doing well. I think the market is just a product of the society we live in - if we're to live in capitalistic societies, I'd rather have the stock market access available to me than not - even if the richest can utilise it more effectively than me.

Imo the right way to make things more "fair" is to tax the rich more and the largest corporations/companies more. Make them pay more of their fair share instead of hoarding the wealth. It honestly might be better for them in the long run too.

[Devil-Dick Willie]

Economics is cynical, and borderline evil. Basically @Gunnersaurus, we live in a closed system with limited resources. To distribute them in such a way as to not burn through them, some people need to live in poverty so you can own a flat screen TV. Taxing more doesn't fix the economic problem. Only renewable energy, recyclable goods and population control can do that. 

If everyone had enough money to own a home and not struggle there'd be 20 billion people on the planet and we'd all be fucked in a few hundred years. Regressing to an agrarian society fixes this (but nothing short of a nuclear holocaust would achieve this) and renewables helps a lot, but at the end of the day society is slow to change. 

[Gunnersaurus]

On 14/01/2023 at 01:14, Devil-Dick Willie said:

Economics is cynical, and borderline evil. Basically @Gunnersaurus, we live in a closed system with limited resources. To distribute them in such a way as to not burn through them, some people need to live in poverty so you can own a flat screen TV. Taxing more doesn't fix the economic problem. Only renewable energy, recyclable goods and population control can do that. 

If everyone had enough money to own a home and not struggle there'd be 20 billion people on the planet and we'd all be fucked in a few hundred years. Regressing to an agrarian society fixes this (but nothing short of a nuclear holocaust would achieve this) and renewables helps a lot, but at the end of the day society is slow to change. 

Somebody told me once there was enough that we could eliminate most poverty. But as you said a lot of people would have to have less. I think a lot of people would actually be willing to loose their flat screen tv and other things if they actually thought it would actually work. A The issue is it would take a global effort and then you would have resistance. Mostly from the right wing who would make up a load of conspiracy theories. However if people actually thought it would make a difference I think you would be surprised how many people would support it. People just have to see tje global effort being made.

However I still would like to go back to the original question about whether large companies could pay reasonable wages to all staff

[Devil-Dick Willie]

We can't actually eliminate poverty. Not without making everyone live with a lot less quality of life. Not for a while anyway. 

[Gunnersaurus]

@Dr. Gonzo I think its quite complicated and depends what job it is. If you take the medical field for example. Doctors rates have been decided by what they will work for. Like you said its not their contribution to society that has decided it. Its that not everyone can be a doctor and people who are smart enough to be one want x amount of money and because there are only so many people that can do it they have to be paid around that much because otherwise there won't be enough doctors.

However the receptionist at the surgery can't make those same demands. If they are working and  getting an income that they struggle to live of is it really unfair to tax a doctor more and use that money to help them? I don't personally think so because the doctor can't do their job without a receptionist. I think a civilised society should start at the  bottom and work up. So we insure as many people as possible have enough first. Like you said it's not as if its been worked out that a doctor contributes x amount to society and a receptionist contributes x amount and so thats why the doctor gets paid x amount and a receptionist gets pays x amount. If there were more people who could be doctors their value would go down. It does make me wonder if the real reason the government want to get highly educated immigrants in is to drive the public sector rates down for professions such as doctors and teaching but that is a different matter.

Other industries can be more complicated. I use to work in building and there is a price for x amount of work. E.g you may get paid £1 for every block you lay. So it can be easier to work out your value. However I use to work more as a labourer. I was ok financially because I lived at home at the time but it would have been hard if I didn't. I use to work with two bricklayers and my wages were taken out of theres (split evenly) however having a labourer allows you to do more work and get more money.  Now some days I couldn't be there because I was at college.  I worked out that the money they were paying for me was less than the extra money they make for having me there. E.g They may make an extra £120 a day between them but pay me £60. Now as I said I lived at home at the time so it was fine but if I didn't it would be hard. So when you think about it a labourer could be living in poverty and a builder could be financially stable. However if the builder paid just £10 a day more they would still have enough but the labourer could get out of poverty. I'm using the prices at the time but you get what I mean. 

Another example is my current job as a chef. After the pandemic a lot of people retrained. And so there was a mass chef shortage. Places put the wages up. They did put prices up but it wasn't enough to cover the costs without taking a slight dent in profits. So essentially they decided that they could take less profit and pay more. We aren't doing more work, we're not better we're not contributing more its just market value. 

[Gunnersaurus]

31 minutes ago, Devil-Dick Willie said:

We can't actually eliminate poverty. Not without making everyone live with a lot less quality of life. Not for a while anyway. 

I've heard different opinions I'd have to look into it myself. You still haven't answered my original question mate

[MUFC]

On 15/12/2022 at 20:36, Dr. Gonzo said:

I use Fidelity, but I'm not in the UK anymore. It's a decent place for a beginner - it's not the most user friendly, but it's a hell of a lot more user-friendly than some of the UK equivalents (like IBKR).

For a beginner, you should just look for stuff that has the lowest possible commission fees - because paying commissions is shit. You shouldn't worry about options or margins trading - that's a dangerous game and shouldn't be even thought about by beginners.

Fedelity compared to the other suggestions seems to have the best reviews. 

[Devil-Dick Willie]

9 hours ago, Gunnersaurus said:

I've heard different opinions I'd have to look into it myself. You still haven't answered my original question mate

If all companies changed their wages at the same time, yes. 

And I live in a duplex, 2 others share my side of it. We have no AC. I ride a motorbike or walk everywhere, but because we generate an average amount of trash, and I eat meat daily, we'd need over 3 earths to sustain my lifestyle. 

Now take that lifestyle (and I live below the poverty line mind you) and apply it to 8 billion people. 

[MUFC]

On 15/12/2022 at 20:36, Dr. Gonzo said:

I use Fidelity, but I'm not in the UK anymore. It's a decent place for a beginner - it's not the most user friendly, but it's a hell of a lot more user-friendly than some of the UK equivalents (like IBKR).

For a beginner, you should just look for stuff that has the lowest possible commission fees - because paying commissions is shit. You shouldn't worry about options or margins trading - that's a dangerous game and shouldn't be even thought about by beginners.

Is this the site you're referring to? 

https://www.fidelity.co.uk/

[Dr. Gonzo]

3 hours ago, MUFC said:

Is this the site you're referring to? 

https://www.fidelity.co.uk/

Idk if that’s the same as the one in the US tbh, the logos are completely different