The rise and fall of the stock markets
There has been a lot of attention focused on the stock markets in recent days in respect to GameStop, the company known for the sale of video games and various related accessories, and a few other businesses.
Through various actions, people were able to push GameStop’s stock to higher levels, making it temporarily more valuable. It seems much of the work can be traced back to online message groups with people working together for short-term investments. This caused concern by those who were invested long-term, as they felt they may start losing money as the price eventually dropped.
I’m not the most knowledgable about the stock market. My understanding, quite frankly, is limited to a project in my high school economics class where we were asked to pretend we had a certain amount of money, select stocks based on that amount and then, each week, we followed the progress of those stocks.
I have a 401K, but, beyond that, I’ve never really had the money available to feel comfortable enough to do any investing on my own.
When I started reading various articles on this matter, my first thought was “frozen concentrated orange juice.” For those who have seen the 1983 movie “Trading Places,” you’ll get the reference. In the film, two brothers, the Dukes, played by Ralph Bellamy and Don Ameche, make a bet with the lives of an upper-class commodities broker, played by Dan Aykroyd, and a poor street hustler, played by Eddie Murphy. Their lives are swapped, through no control of their own, but they eventually team up to get the better of the brothers, making themselves rich and the Duke brothers poor through the manipulation of the stock exchange.
It’s a similar idea to the current events, with it made easier through today’s technology. People can trade stocks from their phone or computer, buying and selling at a moment’s notice.
I suppose whether it’s good or bad depends on how you have been affected. At a cursory glance, it’s the traditional battle between the “haves” and “have nots,” but brought into the 21st Century. Those who have been involved in the stock markets for years see it as a disruption to the traditional practices, while others may see it as a way to make a little extra money for themselves while also showing they have a way to benefit from the system they believe has kept them down for so long.
It’s probably going to result in the federal government instituting more controls on the markets, which, again, depending on who you ask, may be good or bad. Various regulations have been put in place, and then removed, depending on which political party is in power, at a seemingly increased rate in recent decades.
Our economy isn’t fully reflected by the status of the stock market, but it is affected by how well it is doing. Look at energy commodities and the price of gasoline, as an example. Often, it’s those who invest in these areas who have a bigger determination in how much we pay to fuel our cars.
Should there be an even playing field between the large hedge funds and investment agencies and the common everyman? Sure. As with everything else, though, there’s also a responsibility to understand and accept the consequences of whatever action you take.
My guess is this is just the beginning, and it would be good for all of us to educate ourselves in the event we are affected.
(Howell, a resident of Colliers, is managing editor of The Weirton Daily Times, and can be contacted at email@example.com or followed on Twitter @CHowellWDT)