Gabu
Atlas Star
Posts: 28,386
Political Matrix E: -4.32, S: -6.52
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« on: August 15, 2005, 09:44:11 PM » |
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It seems to me that if insider trading were legal, there would be a huge incentive to just stay with one's own company's stock and there would be no incentive to buy stock in other companies, given that you know that you have the giant advantage of likely being able to predict very well when your own stock will rise and fall. Hence, the current situation where companies' stock is purchased by many people throughout a country such that every company has a diverse array of stockholders would very, very quickly grind to a halt and fall apart, being replaced by a scenario where the only people who own stock in a company are those who actually work there. There will be no mystery at all to it; right before a stock falls, everyone would sell, and right before the stock rises, everyone would buy. Slowly but surely, companies would just lose more and more money as it gets funnelled out to the stockholders, all of whom who know exactly what to do and when to do it.
As far as I can tell, we might as well not even have a stock market at all if we make insider trading legal.
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