Will the company’s earnings from the real market of goods and services be greater in the future? If so, it is worthwhile to own a share of that company. But if they will be less in the future, so too, the company will be worth less.
What Paul Graham Is Missing About Inequality
Tim O'Reilly

First of all, thanks for this really great and inspiring writing! It was a pleasure to read it.

I want to emphasize on two aspects. Here, you are stating that if the earning of a company will increase it is beneficial to own shares of that company because the value of those shares will increase. This would be true for complete efficient stock markets, but unfortunately our stock markets are not working that way. Thus, even the stock prices for companies whose earnings will not increase in the future can rise and vice versa. This is an elementary problem which creates a lot of uncertainty and instability. You are highlighting this issue later on when you state that

“financial markets have increasingly gone from being a source of capital for companies to a kind of giant betting pool, in which winning and losing is much less correlated with underlying economic activity.”

This is a major problem in my opinion and is one further component of the entire inequality discussion.

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