Comments by "Plato\x27s Cave alum" (@platoscavealum902) on "Professor Richard Wolff: GameStop Reveals The Core Rot Of US Financial System" video.

  1. Warren Buffett’s mentor, Benjamin Graham, astutely noted that: • in the short-term the market is a voting machine (people place their 'votes' or bets based on their opinions) • in the long-term, the market is a weighing machine (meaning that: in the long-term the value of a company is mainly tied to the rate at which the company makes money. It’s tangible evidence that can be 'weighed,' not a mere opinion) It is true that plenty of unsophisticated investors will lose money 'voting' for their favorite stocks. Unfortunately, it is likely that it was going to happen one way or another for the ones who have money 'burning a hole in their pocket.' I’m not a speculator, mostly I hold stocks long-term. The value of the companies I hold goes up because good companies, with competitive advantages — retain positive earnings. Over time, those profits add up to enormous sums in the long-term. ...The longer one holds a company with competitive advantages — the more exponential growth to the stock price (in terms of percentage gain).
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  2. I think when one assumes that the whole stock market is a casino — they trade as if it really is a casino. The fact is that owning shares in a company is very similar to owning a private business or a farm. The major difference is that a share holder only owns a tiny sliver of the company (a share), and a business owner often owns the entire business. Sure, some people speculate on the price of a share but that doesn’t change the fact that a stock 'share' literally represents ownership in an actual business. The job of an investor is to not pay attention to the speculation but rather the intrinsic or underlying value for any given company and only buy when it is priced inexpensively — relative to cash flow, earnings, and a projected growth rate.
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