RE: Martha Stewart and her Merrill Lynch Broker

From: matus@matus1976.com
Date: Thu Jun 05 2003 - 14:47:07 MDT

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    > gts wrote,
    > > Why is it a crime in the USA to profit from information one has
    > in one's own
    > > brain that others don't have in theirs? Isn't knowledge and insight
    > > something we should reward? Where in the US Constitution is it
    > stated that
    > > the federal government is granted the power to tell US citizens
    > what they
    > > can and cannot do with the business information contained in their own
    > > brains? Who owns our brains, anyway?
    >

    My take on this subject, stock values are very subjective and based alot on
    what a person percieves a company to be worth at a time in the future.
    Companies, can and in fact have been made or broken merely on their
    percieved value, and not necessarily their real value. If you are a
    primarily stock driven company, then your company can *fail* merely because
    more than a critical number of people *think* it will, regardless of
    reality. For this system of investing based on possible perceived future
    value of something to work, the ability of individuals to manipulate future
    perceived values must be curtailed. In insider trading, ones knows that the
    percieved value is not accurate, or that due to knowledge they know, or an
    action of theirs they will take, the percieved value will deviate much
    further from the actual value. If the SEC did not curtail these activities,
    it would make investing in stocks more risky than investing in shady
    secretive governments. Who knows if that they are telling you has any
    modicum of truth? Its the enforcement of these rules that allow this kind
    of manipulative perception based investing to continue. If the SEC did not
    enforce these rules, the stock system would crumple. Fine with me. People
    would have to then invest in companies with more objective criteria.
    Studies I have heard of stock investing suggest it is little more than
    gambling, even with extensive knowledge and research. I believe this is in
    part because the weight of percieved value holds sway over real value, which
    is what a stock *should* represent. Of course, I am no expert, and may be
    completely wrong. But I will not be investing in stocks anytime in the
    future.

    regards,

    Michael Dickey

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