Thursday, October 23, 2008

The solution

From what I can see the stock market is an exchange of money. It's not represented by the true value of anything. There's a lot of terms like growth potential, profit outlook etc... but it's based on a guess. People base their guesses on the news and research. I understand that if you do your home work you can make a lot of money. Research the company they say. Why I ask, if the stock can go up or down 50% in a day easy. You need to research the large money manipulators. Build up a large stake in a company or sector, talk it up, when the guys not in the click buy it up the big guy sells thus taking other guys money. (This isn't a guess on my part. It was stated, in so many words by a well known hedge fund manager.) Bad system I say. The fix - If you had to buy stocks directly from a company, no market place. The value of which represented by the actual company value and regulations in place to stop manipulation practices. It may not be a perfect world but recession would be a thing of the past. Any flaw or loop-hole you can come up with I can state a rule to close it. I think my elementary school kid could see a problem when the price of oil can go up approx 400% in one year when the supply demand changes only around 20%. It's not a representation of the value of oil. It's a representation of a pot of money called stocks or commodities. It's the supply and demand of the stock. A piece of paper or an electronic number on a computer some where. Very strong sentence!! The stock price is a representation of the supply and demand of the piece of paper. Wow!! It's the same thing as saying I have all the # 0156702 paper shares sold so if you want to buy some you need to pay someone a higher price to get them to sell it. The big money owns a large share. The small money wants in. The price is going up. In the mean time # 92516 is down to only 80% sold and big money has sold out that one. The small money wants out and the price is going down. But wait, there's a paid ad that says # 64191 has hit bottom and it's time to buy. Guess what? Big money is already in and buying to get the ball rolling. Big money slows and stops buying but small money keeps buying and the news is good. When will it stop. I think you can figure that out. When big money sells out at a profit or in other words when they take small money's money away. Volatility is a hedge fund dream come true. Swings of 20 - 50% in a day can be had.
This is a world market now. It seems to create a global economic battle ground and it seems the price of oil is a key to the price of all things. You want to create a global recession just raise the price of oil. It seems to be a control chip but at the same time seems to be a weakness. If you control enough money you can economically destroy a large country. So what entity is the largest controlling unit. The UN or world bank. I think at the top they said oops, we let the oil price go to high and now we need damage control. The price of oil/gas is down and coming down. That will pick up profits and let the world continue. We can see now that the price of oil will need to be carefully manipulated to let the games go on. When a player in a controlling position starts taking to much everybody, drops out. The game's just no fun any more.
Don't be to greedy big money or you'll have no one left to play with.
I almost got beat up in grade school for opening up my big mouth. I'm just a little guy pointing out issues with the largest powers in the world effecting us all. Please go easy on me.