> I for the life of me cannot figure out what could possibly justify this valuation for __INSERT_SKYROCKETING_SEC_LISTING__
FTFY.
Why?
It's what the stock market has become. It used to be a way for companies to raise cash to grow and pay dividends, and for investors to amass generational wealth at generational speeds. Now it is just a war of algorithms and differential equations to get rich as fast as possible.
Some reasons:
1. Option trading (really came into its own in the late 80's/90's)
2. Electronic trading (anyone with a brokerage account and $1,000 can play)
3. Algorithm trading (trades happening at the microsecond scale)
4. Insane speculation (Look at the historical graph of the DJIA and you will see in the last 40 years things have gone batshit insane)
5. Black-Scholes equation (the equation that governs the insanity)
For trading firms with servers in the NYSE building that are making trillions of trades a day at microsecond speeds, it is a statistical gambling model fought by algorithms (check out RadioLab's special on this) with no reason. For the rest of us, we're left with index funds that hope the average trends upwards.
FTFY.
Why?
It's what the stock market has become. It used to be a way for companies to raise cash to grow and pay dividends, and for investors to amass generational wealth at generational speeds. Now it is just a war of algorithms and differential equations to get rich as fast as possible.
Some reasons:
1. Option trading (really came into its own in the late 80's/90's)
2. Electronic trading (anyone with a brokerage account and $1,000 can play)
3. Algorithm trading (trades happening at the microsecond scale)
4. Insane speculation (Look at the historical graph of the DJIA and you will see in the last 40 years things have gone batshit insane)
5. Black-Scholes equation (the equation that governs the insanity)
For trading firms with servers in the NYSE building that are making trillions of trades a day at microsecond speeds, it is a statistical gambling model fought by algorithms (check out RadioLab's special on this) with no reason. For the rest of us, we're left with index funds that hope the average trends upwards.