02 June 2012

The Ins and Outs of the Ups and Downs

For several years now, I have had an increasing suspicion that there is no such thing as real value on Wall Street...that stock prices have nothing to do with the true value of a company in terms of being able to deliver, experience growth, or even have assets that exist in a physically recognizable form.  It is so obviously a numbers racket, that I am often astounded that it gets serious treatment in the news media at all.

...wait, scratch that, the news media gave serious treatment to Britney Spears' hair color change.  Obviously, they are not to be trusted.  At all.

My concerns over the non-reality of the stock market were further solidified this morning by a commentator on ABC news.  Now, the more astute among you will instantly recognize the hypocrisy of me citing a source in support of my position when I lambasted that same source in the previous paragraph.  However, THIS commentator was wearing a dress shirt with The Cat in The Hat all over it, so he obviously knows the shit about which he is talking.**

The Dr. Seuss fan declared that 70% of the daily movement of share prices is governed entirely by computers adhering to various (and wholly imperfect...can something be 'wholly imperfect'??) algorithms.  His supporting evidence included the fact that every time a certain young actress has a favorable mention in the news media - a new movie release, a magazine cover, or an increase in the number of search engine hits - Warren Buffet's wealth grows by 1-2%.  This is not because The WB has a vested interest in digital  wank sites, but because the algorithms cannot distinguish between Berkshire-Hathaway and Anne Hathaway.

And *I* am expected to perform independent market research to determine the risks before making an investment?!?  I for see a niche for an entire new breed of market research - investigating the algorithms so you can hedge your bets.  Wait, now I for see a whole new breed of Gordon Gekko - writing viruses and worms that artificially inflate click-through rates.  

More and more it seems, when it comes to investing, there is no such thing as truth (and perhaps, there is no such thing as truth at all, but I have not had enough coffee to go that deep yet).  Accounting is a completely deceptive occupation, some of the most profitable companies have no corporeal form, even real estate is no longer 'real', considering it is possible to purchase condos on a simulated space station.

I often espouse the notion that the value of an object lies entirely within its utility - and NOT within what someone else is willing to pay for it.  In the grand scheme of survival, a 600 year old bottle of wine is worthless without a $2 corkscrew.  Skills, tools, and malleable resources are the only truly valuable things on earth - and even these are useless without strength and health.

This leaves me with the uncomfortable question "what should I do with my money?".   

Well, if there is no such thing as real value in the world, then it obviously exists only in my own conscience and thus is entirely subjective.  Therefore, the only worthwhile thing to do with my money is spend it on whatever the fuck makes me happy, no matter how transiently or superficially.

And this is how I justified spending the extra fifty cents to buy brand name butter...besides, it was Berkshire Farms, and it would suit me just fine if Warren Buffet had ALL the money in the world.

No wonder it takes me so long at the grocery store!

**I do hereby declare, that from this day forward, I no longer subscribe to the rule that one must not end a sentence in a preposition.  It is a stupid rule that makes for very cluttered clauses.  I see no reason why a participle should not be allowed to dangle in such circumstances where it will not leave the reader breathless with anticipation in regards to what I am speaking of.


Teresa Elliott said...

wow, you're such a smart and entertaining writer. i too faced the tyranny of "don't end it with a preposition" recently and also decided fuck it, from no on i err on the side of economy.

Teresa Elliott said...

wow, you're such a smart and entertaining writer. i too faced the tyranny of "don't end it with a preposition" recently and also decided fuck it, from no on i err on the side of economy.

Elsja said...

You and Andrew have been watching the same shows and documentaries lately.

Andrew said...

Great post and very astute.

Algorithmic trading programs are indeed an extension of the falsification of the 'market' and just another nail in the coffin for the current monetary system. When money is being created by creating debt and therefore more money, something has to give in the end.

In case you haven't watch these, check out these videos to further blow your mind on how ridiculous the system is.