Pilant's Business Ethics

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Tag: investor

System Rigged Against Small Investor.

System Rigged Against Small Investor.

Facebook IPO: Retail Investors Lose Out While Wall Street Clients Make Profits

In case a reminder was needed, the fallout from the Facebook IPO illustrates that Wall Street appears to be designed to serve the well-connected at the expense of ordinary people.

Ordinary investors may have lost as much as $630 million collectively from the plunge in Facebook’s stock following its public debut, Bloomberg reports. These are the same people who used hundreds or even thousands of dollars of their prized savings to bet on the stock only to have its value drop to way below its opening price of $38 per share.

Facebook IPO: Retail Investors Lose Out While Wall Street Clients Make Profits

Is it moral or ethical to have a rule system which allows the large institutional investors to thrive while penalizing the small investors? Does this encourage responsible investment and make Americans better people?

I think not.

This kind of thing drives people away from investment and it should. That the game is rigged is obvious to the most casual observer. It takes an enormous amount of advertising and badly written text books to get people to buy stock.

Now let’s differentiate here. I heartily approve of investment, that is, buying stock in a company to collect regular dividends and over time have the value of the company go up. That is investment. It carries some risk but it is not the kind of risk carried by those that believe they can buy and sell stock hour by hour, day by day, and make a profit thereby. That is speculation and speculation is inherently risky.

But not all speculators are equal. Let Facebook be a warning to all small investors. Whether you win or lose, investment banks will win.

This is wrong.

It damages faith in the system because the system doesn’t deserve it. If people don’t believe in the basic fairness of society than they will begin to act in ways that are detrimental to that society.

More simply, if playing by the rules doesn’t work, they’ll try something else.

Justice and fairness are for everybody and when they are denied we all suffer.

We should always have in the back of our minds the basic concept of fairness in our dealings. That is how you build a just and fair society.

You punish the wicked and protect the innocent. Is it hard to understand that rule?

James Pilant

 

Who will make them pay? (via Livinglies's Weblog)

Let’s saddle up! The Wall Street Banks absorb every kind of benefit from being in this nation including taxpayer dollars. Yet, when it comes to taking any responsibility as citizens, they are notably absent. Is there a kind of vicious hypocrisy in absorbing benefits but paying none of the costs?

Let’s make these people know that we know they have failed to act in accord with basic patriotism.

James Pilant

My thanks to Livinglies’s Weblog.

Who will make them pay? You will. Yesterday, in six cities across Illinois, people stood together and demanded Wall Street banks like JPMorgan Chase pay their fair share to end the revenue crisis, create jobs, and stop illegal foreclosures. In New York City, thousands marched on Wall Street demanding that Millionaires and Big Banks pay their fair share. In North Carolina, community leaders made sure the shareholders of Bank of America faced up to … Read More

via Livinglies’s Weblog

The Stock Market Explained in 1952!

The world of 1952 where the economy was booming and wives didn’t work, have a look.

We live in a very different world and much of the change in the status of the middle class is evident from what you see in the film.

James Pilant

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