Monday, April 4, 2016

The end of Wall St is in sight.

For the past 100 years, people have increasingly been led, like sheep, to believe that the stock market is some kind of a wealth machine.  You put money into it your whole life long and then at retirement you end up with a lot more than you ever put in.

But since everyone believes this, where will all the money come from to make it all come true?  Most companies do not pay dividends.  While it is true that corporations do share buybacks, this is mostly in order to curb dilution that would otherwise have occurred due to stock based compensation.

While I've never questioned the fact that Wall St and investing in paper assets is a fad, I've always wondered what would finally be the catalyst of its destruction.  Perhaps I have just seen it in this news story which discusses the new and rapidly growing trend in AI based investing.  Since stock market investing is really just gambling in which one well informed party (Wall St.) cleans the clock of the unsuspecting Mark and Patsy, how is Wall St. going to manage to keep fleecing the public once the public has cheap access to AI?  Additionally, Wall St fee structure could collapse in the face of this new threat.  It takes a lot of money to pay all those high NYC city salaries and if Wall St can't fleece it from Mark and Patsy anymore then bye bye Wall St.

AI levels the playing field between the common man and Wall St and once that happens then there is no money to keep Wall St running.  No money to keep all the trading computers humming and to keep all the liquidity flowing that keeps day traders interested.

The Watsonification of Wall St should be interesting and entertaining to watch.

1 comment:

Augustine said...

Does Watson watch CNBC and read Barron's and other stock peddling side shows like Mark and Patsy? No? Then it's useless other than in a price discovering free market, which Wall St ain't.

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