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Old 08-03-2015, 05:18 PM   #21
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Originally Posted by Spanky View Post
it can lead to market crashes also.
Buying (rebalancing) opportunity.

Originally Posted by nash031 View Post
But investors benefit from the existence of frequent traders...

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Old 08-03-2015, 09:32 PM   #22
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Originally Posted by Spanky View Post
I have zero portion for any kind of trading. There are so many other things to do for fun. Trading (or gambling) is not one of them.
Clearly everyone agrees with you. That is why there is hardly any trading anymore.


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Old 08-03-2015, 11:14 PM   #23
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Let's pass a law banning stock trading. When you buy stocks of a company, it will be for life. Your life or the company life, whichever ends first.

So, if you happen to buy a hot stock like Apple, how do you cash out if you cannot sell? No, you don't. What if you think the company is about to go bankrupt? So, you save your skin at the expense of the dumb guy who buys the lousy stock from you? Nope, not allowed. You own it forever, for better or for worse.

OK, maybe we will let you sell, but as a deterrence, let's tax capital gain at 50%. That will teach you. You cry out "What capital gain, I am losing money". Well, we will just tax 25% of the proceed, if you have no gain.

That will slow traders down.
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Old 08-04-2015, 08:24 AM   #24
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Originally Posted by Spanky View Post
Not difficult at all! I have zero portion for any kind of trading. There are so many other things to do for fun. Trading (or gambling) is not one of them.

Hmm, I need to go see a shrink, as gambling (lessor degree trading) is by far my most favorite thing to do for fun. After 40 years of it, you think it would have gotten old. But it is just as fun today as it has ever been.

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Old 08-04-2015, 09:41 AM   #25
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Originally Posted by Pecan518 View Post
Hello All. I'm a long time lurker and this is my first message.

First, let me say I agree with the sentiment of John Bogle's statement. But I do want to point out one very important benefit additional trading has over and above the initial capital placed with firms. The trading allows investors to earn higher returns (than say a bank account) and still access their money later when they want to. Imagine if the only trading was with firms (IPOs, SECs, and share repurchases) (i.e., when firms raise capital or return capital). In that case when I get paid and want to invest my money, I can only buy stock in a firm if it is selling new shares right at that moment. In addition, I can only get money back from my investment if that firm decides to pay dividends or repurchases shares.

I do think John Bogle is correct in the idea that Wall Street makes lots of money from trading and wants to encourage investors to trade for their own benefit. But it is also true investors do get some benefit from having a liquid market so they can invest and then access their investment at a time of their choosing. Besides the 1% or trading that is used to raise capital, I'm not sure how much more is "good" trading vs. churning. It might be just another 1%, but it is something and without this function of the markets, I think many of us would have a hard time retiring early.
Well said.

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