A healthy market and a healthy economy need both investors and traders to flourish. Investors value a degree of stability while traders thrive on volatility. There needs to be a balance.
Trading is a zero-sum game. Trading does not add to the national productive wealth. Investing does.
The pendulum of market regulation and behaviour has swung too far towards the interests of the traders. This can be epitomised by the rise of Elstone, for example. The SFE was a traders market, not an investors market. The impunity of the market supervisors to deal with rampant false rumours, rampant insider trading, and collusive short selling .
It is my view that on Friday we again observed massive short selling on the ASX in complete defiance of the current restrictions - after all, the masters of the universe can do whatever they like.
Perhaps the time has come for people who are investors to realise that the stock market is a waste of their time. Perhaps they should take their bats and balls and go do something productive somewhere else.
The traders can then merrily continue with their destructive, non-wealth-creating zero sum games. But without the investors in the market, they may find it becomes a very boring and unrewarding game.
