more day traders and high-frequency traders means less volatile prices on short time scales.
Can’t people stake their money either to increase or to decrease volatility? Amplifying every minute’s price movement by a factor of two should still be expected value zero.
probably creates some real economic value, but probably not much, especially at the margin
I expect more value from forecasting, hopefully not just because I’ve been spending time on prediction markets lately.
If we lived in a world where speculating on ventilators and medicine and masks were accepted, going long on those enterprises weeks or months before the politicians admit a need would be useful.
At the margin, every dollar by which the price goes up is a dollar for every share the company issues, and also might change the amount of shares it issues. (Right?) If all trading stops and all that the shares do is pay out dividends on earnings, every dollar shifted from a company that makes 1% on marginal capital per year to one that makes 5% on marginal capital per year is ~+4% of real value, right? And a lot of that (how much?) is captured by third parties anyway, so if the investor sees 5% returns that’s more real value generation.
Shouldn’t every dollar that goes long on the company (vice versa for short) necessarily go indirectly, perhaps acausally, to the company? Note that the initial valuation should take into account future buyers.
Can’t people stake their money either to increase or to decrease volatility? Amplifying every minute’s price movement by a factor of two should still be expected value zero.
I expect more value from forecasting, hopefully not just because I’ve been spending time on prediction markets lately.
If we lived in a world where speculating on ventilators and medicine and masks were accepted, going long on those enterprises weeks or months before the politicians admit a need would be useful.
At the margin, every dollar by which the price goes up is a dollar for every share the company issues, and also might change the amount of shares it issues. (Right?) If all trading stops and all that the shares do is pay out dividends on earnings, every dollar shifted from a company that makes 1% on marginal capital per year to one that makes 5% on marginal capital per year is ~+4% of real value, right? And a lot of that (how much?) is captured by third parties anyway, so if the investor sees 5% returns that’s more real value generation.
Shouldn’t every dollar that goes long on the company (vice versa for short) necessarily go indirectly, perhaps acausally, to the company? Note that the initial valuation should take into account future buyers.