Comment by bakhy | Hacker News Reader

Comment by bakhy | Hacker News Reader

reading about the stock market is always kinda disgusting to me. "If a speculator believes AAPL is undervalued, he buys a bunch of shares of AAPL. This drives up the price until AAPL is no longer undervalued - then the speculator can sell his AAPL and reap the profits." -- the part after the dash shocked me :) seems like the entire purpose of the market is speculation? does anyone actually invest in companies any more? :D

i did like reading this, informative. gave me a nice other perspective on HFT.

however: (a) Goldman Sachs does not have it's own HFT outfit? they are the "helpless victims" here? sounds a little unbelievable. (b) why is it exactly socially beneficial that some HFT company performs this "robin hood" act (lol)? particularly if it exposes us all to the risk of market volatility due to mindless algorithms performing enormous, senseless trade volumes with each other?

all in all, i'd vote for that very small tax on trades, just to get rid of this as-yet-unseen level of speculation.

Speculators are people or institutions who purchase an instrument (stock, commodity, etc.) in anticipation of price movements in order to later sell the instrument, without having an underlying business need for the instrument. [1] In the case of common stocks, unless someone's intent in buying the stock is to take over the company, use the voting rites to influence the makeup of the board, or otherwise use the voting rights, you are a speculator. You may be a long-horizon speculator, but you're still a speculator.

Now, if you're a long-term speculator and the reason you dislike people who typically speculate over shorter term horizons than you do is that you believe they adversely affect your prices, consider that short-term speculators are often the people with the highest bids and lowest offers are shorter-term speculators.

[1] http://www.nasdaq.com/investing/glossary/s/speculator

p.s. how does moderation on this site work? i have been downvoted, and i wonder - is this an act of some admin moderating, or do users with sufficient karma get a downvote button and one of them simply dislikes my comment?..

Sometimes downvote means "I disagree". Since you proposed a transaction tax, most likely a libertarian apologist pounced on you.

ah, ok. i guess that's their right ;)

> ..., or do users with sufficient karma get a downvote button (...)?

Yes, they do. I always forget the threshold, but there is one. Check the 4th point in the FAQ: http://ycombinator.com/newsfaq.html

thanks!

The threshold when I crossed it was 500 karma to downvote. Not sure what it is now, but I got the impression it doesn't change that often.

Reply on news.ycombinator.com