Comment on stockbrokers

Someone wrote the following insightful comment in Steve Sailer's blog:

[Y]ou don't have to be that smart in order to make big money in stock brokerage, you simply have to have the hunger to make thousands of phone calls and network like mad.

Of course brokers don't add any value to society.

Luckily for society, there are fewer stockbrokers around than there used to be, thanks to the availability of online trading. Most of the stockbrokers from yesteryear have probably become real estate agents or headhunters, two other occupations that don't add much value to society. (See Value creation vs. value transference.)

Comments

[anonymous_coward]

Hey, HS - a completely unrelated point, but have you seen Obama's creepy "call to service" speech? This thread nicely picks it apart, and it's not a pretty sight. And given your previous posts, I don't think it will take you long to see how despite the moralizing, this will hurt the poor more than it does the rich.

http://boards.straightdope.com/sdmb/showthread.php?t=476376&page=1&pp=50

[mnjohn]

The smart ones work in arbitrage or at hedge funds which does require a great deal of intelligence.

[Gannon]

This value creation versus value transference stuff is quiet interesting, but much older than people seem to think. Hitler in Mein Kampf talks about how Aryans are value creators and how jews create schemes to transfer that wealthcreation to them. Hitler disliked traders, speculants, stockbrokers and so on because he believed that they didn't add any real value to the economy. Nowadays, to be rich, unless you are a surgeon or a bookauthor you have to create some sort of money transfering scheme. However, gannon believes that a person who creates a company does legitimate wealthcreation and not only transfers money to himself from his employees work. But yes, to be rich you need to find a way to appropiate other people's work.

[Buckwheat]

Sigma, everything is sales. Folly-vous?

[dreamin]

It's also possible to get many really hot girlfriends if you shamelessly hit on lots and lots of girls. Even if you are not particularly attractive as a man.

As far as creation of value goes, it's sometimes hard to tell. A lot of people in the economy do jobs that don't seem to have much of a point -- from a broad perspective. And yet free market economies seem to work quite well, in general.

The old USSR didn't waste much resources feeding stockbrokers; ad-men; plaintiff's attorneys, and so forth.

[100 Miles and Running]

The old USSR didn't waste much resources feeding stockbrokers; ad-men; plaintiff's attorneys, and so forth.

They did however create some fantastic pieces of weaponry and did some really far out science. Marx bless them for that!

[Jill]

I think the primary qualifications for stockbrokers are chutzpa and a golden tongue. Most stockbrokers I've known were shallow and obnoxious, but knew how to sound a lot smarter than they were - just keep pushing, bluffing, and lusting after big commissions!

[David Alexander]

thanks to the availability of online trading

Yes, thanks to online trading, I too can purchase oil ETFs at the peak while watching them slide down in a the past few days of trading.

[Buckwheat]

I have a lot of respect for stockbrokers.

Shoot me!

[dearieme]

"and did some really far out science": yup, Lysenko.

[Buckwheat]

Obama has the IQ and demeanor of a stockbroker.

[Buckwheat]

Here's something interesting. I wonder what the Big O would do about such evil sentiments. Perhaps we should dub him Mr Panacea?

The ultimate story of a liberal who has been mugged

In its May 2003 issue, American Renaissance initiated a series, "My Racial Education: Personal accounts of what led AR readers to racial consciousness." One of the contributions in the first installment was by VFR reader Mike Berman. It is reproduced below.

I Was a Red-Diaper Baby
If the definition of a liberal is someone who has never been mugged, then to know my history is to understand my political journey.

I was a red-diaper baby. That is, my father was a card-carrying member of the Communist Party USA. Years later, he came partly to his senses, but remained a liberal on all issues, including race. Predictably, my parents encouraged their children to go forth and enjoy the multi-racial joys of New York City. I even marched with Martin Luther King when he made his famous speech, but his dream became our nightmare. Multi-racialism resulted in a private, and on some level deserved, holocaust for my family and me.

I am the eldest of five. One of my sisters, who was 13 at the time, was raped when she attended a party on our block. One of the blacks repeatedly asked her to go upstairs to see his apartment. After several rejections, he accused my sister of racism. As a well-indoctrinated, guilt-ridden liberal, she had no choice but to go with him. Out of fear and shame, my sister did not share her story with us until she landed in a mental ward a couple of years later.

Another sister was raped by a black open-enrollment "student" at City College in a locker room after she attended a co-ed swim class. The prosecuting attorney told my sister it was an open-and-shut case because she did everything she was supposed to do: She reported the event immediately, gave a detailed description of the accused (including a bizarrely shaped goatee), and then went directly to the hospital. However, after all the evidence was given, when the jury was polled, the whites voted to convict, but the tribe hung together and hung the jury.

Ironically, before her trial even began, another black tried to rape her in the elevator of her own building. He entered the elevator after her, and sent it down to the basement. There he cut her neck and was about to have his way with her, when someone luckily brought the elevator back up.

The following term, when my sister attended her first political science class, she found that the black who had raped her after the swim class was to be her classmate. She marched off to the administration office in a fury, where she loudly threatened to sue the school for its lack of security. They settled then and there by agreeing to pay for her to complete her education in Israel.

My mother's wrist was broken when an African American relieved her of her pocketbook. I, myself, had a gun at my head twice on the streets of New York when blacks mugged me.

During the period of my family's holocaust in the late '60s and early '70s, I was starting my career as a teacher at George W. Wingate High School in Brooklyn. It had recently opened as the city's first deliberately-integrated high school. At first, it offered a good education, but I was struck by the differences in the abilities, work ethic, and behavior of the races. I also noticed that the students segregated themselves in the cafeteria.

Integration can be defined as the period from when the first black moves in until the last white moves out. As the school began to tip in the expected direction, there was racial violence and several race riots. This festering condition culminated in the infamous Day of Knives. On the last day of the school year, as the students were going home, many blacks menaced their white classmates with knives, and warned them not to come back. The whites got the message and stayed away.

I served as dean of boys during the last of my eight years at that school. We averaged five arrests a day out of a student body of about 3,000. One of my duties was to convince fearful parents of victims to press charges. Every day a paddy wagon came from the local precinct to process the day's catch. Sometimes we ran out of handcuffs.

There were junkies nodding out in the cafeteria, and the aroma of pot was everywhere. It seemed as if more students roamed the halls than attended class. Every six weeks or so, a teacher could be expected to be sent to the hospital. I remember one young handicapped woman who walked with a cane. Someone pushed her down the stairs, and she did not come back until the following year. After only a few days someone pushed her down the stairs again. She never came back.

I also recall the day a substitute cop was assigned to my office. At first, he put his feet up on the desk and expressed pleasure with such an easy assignment. By the end of the day he was complaining he was working harder than a desk sergeant.

One Senior Day started with water pistol battles, graduated to entire waste baskets full of water, and then fire extinguishers. The school had to be evacuated because the water was ankle deep. In one five month period, five of our students had either committed murder or had been murdered. One teacher who was assigned to the school left for lunch on his first day and never came back.

By the 1980s I had developed an interest in the race question. My family and former friends would call it an obsession. They typically dealt with The Problem by running away from it. To me, how liberal a person is on the topic is usually a function of his geographic distance from it.

I have always been interested in statistics, and my first exposure to racial stats came when I was watching a television program about the Bernie Goetz case. [Mr. Goetz was a white New Yorker who shot several young blacks who were trying to mug him.] I was stunned when the announcer said blacks were ten times more likely to commit a violent crime than whites--stunned not by the number, but to learn that this information was available and being discussed. I sent for the transcript, and found myself compiling a collection of articles on crime. My next great discovery was Charles Murray's Losing Ground. In 1992, I learned about Jared Taylor's Paved With Good Intentions from the Bob Grant radio program. The rest, as they say, is history.

It has not been easy for me as a New York Jew, embracing the views that I do. I am regarded as a pariah when I express myself. Mostly by choice, I am estranged from my family. My comrades are my gentile wife and retired former colleagues who have shared my professional experiences and who have drawn similar conclusions from their observations.

Mike Berman, New York

[100 Miles and Running]

and did some really far out science": yup, Lysenko.

dearime,
Haven't you ever heard of the Ekranoplane? And they are doing fascinating work in hominology, UFOs as well. And if anyone can tell me what Yamantau Mountain is all about, I'll send them beer money!

[Tschafer]

The idea that stockbrokers and real estate agents "don't add value" is quasi-Marxist claptrap. I'm surprised that this sort of thinking is still around.

Incidentally, most of the USSR's "awesome weaponry" and "cool science" was stolen for them from the West by the T Directorate of the KGB; I admit, they were really good at stealing stuff.

[100 Miles and Running]

Tschafer,
You telling me that the movie "Firefox" wasn't based on actual events? By the way, plenty of goodies were handed over by so-called Americans like the Rosenbergs. No stealing was necessary. Can't trust a commie! But plenty of their nifty stuff was/is homegrown.

Posted by:Buckwheat | July 23, 2008 at 08:11 AM

Problem with liberals is that it always takes a rape, robbery, a lead pipe over the head or 3 bullets in the chest before they can figure out what is going on. Sometimes not even then, so they usually blame themselves or that old standby, "society". The story actually had me laughing a bit when he mentioned the school he taught at and how the black students were preparing for attending the most popular historically black college, jail. What did he expect from blacks, that they were going to chase him down to give him tickets to the Met?
The parents ought to be ashamed though. Not telling your kids about the reality of race(that you gonna get raped if you aren't careful) in the US today is tantamount to child abuse.

[Half Sigma: this is a post about stockbrokers, not blacks and whites. I'd appreciate it if comments were more on topic, especially for comments that are mean spirited with respect to race. Thank you.]

Remember in 2003 when you told everyone to get out of stocks and into a money market??? Maybe now's a better time for that advice, but you kinda missed a large bull market that whole period from Nov 2003 to Oct 2007???
You add no value to anyone who listened. I feel bad for those who did.

You wrote, and I quote:
"Advice for 401k investors
If you have a 401k plan, and it’s invested in stock market funds, especially stock market funds that have a strong emphasis on tech stocks (and if you don’t know what kind of stocks your mutual funds are invested in then maybe you shouldn’t be invested in stock market funds), then my advice is GET OUT. I repeat. GET OUT OF STOCKS. Put all of your 401k money into the safe money market fund (which hopefully every plan has at least one of) and wait.

The bottom of a bear market comes when everyone thinks that stocks are a bad investment. We are obviously far away from the bottom because everyone is still investing in stocks.

100% of my own 401k money is invested in a money market fund. I have plenty of non-401k money invested in stocks of my own picking, but I have no use for any of the stock funds that my employer has offered me. Unfortunately, I’m not lucky enough to have an employer who offers a self-directed 401k plan where I can pick my own stocks. So my 401k money is invested in the safe money market fund, which will maintain its value when the echo-bubble finally bursts.

posted November 20, 2003"

you couldn't have been more wrong...

Maybe your broker can help you determine the next "bottom" since you can't seem to call one yourself.

[InterestedParty]

"you simply have to have the hunger to make thousands of phone calls and network like mad. "

If it was that easy, why doesn't everyone do it? Cognative dissonance is a beautiful thing.

"Of course brokers don't add any value to society. "

No doubt HS and the guy posting this are working on an engine that doesn't rely on fossil fuels or a cure for cancer.

You guys are hilarious.

[Mike]

"Most of the stockbrokers from yesteryear have probably become real estate agents or headhunters, two other occupations that don't add much value to society"

I think a few may have become politicians.

[tmmm]

"But yes, to be rich you need to find a way to appropiate other people's work."

But isn't this just the definition of being rich? After all, money is just a ticket that allows one to use other peoples work or get their possessions.

[Stephen]

Stockbrokers, financial advisers, etc. have got to be one of the most unproductive bunch of "professionals" that ever existed. Taking commission for selling someone a package of stocks is ridiculous. Go away stockbrokers, let us "broker" our own investments with the people actually holding securities and save ourselves your 10% commission.

[j]

Your economic education is faulty or nonexistent. Merchants, salesmen, speculators, middlemen, etc. are vital for any complex economy. You have the choice to search yourself for a buyer for your home, work or whatever, or pay to an expert real estate agent or headhunter to help you. These people provide a service and people knows it and is ready to pay for it. For me you are not more than a quarter sigma or less.

[Syntax]

"These people provide a service and people knows it and is ready to pay for it."

We's surely do!

[Saladman]

If stockbrokers contributed nothing to society, they'd have died out before this. You're making the old hostility to the middleman mistake; but brokerage can add more value than people think, or middlemen wouldn't be needed in the first place.

Having said that, if technology (such as online trading) can make it economical for people to do without them, that's almost certainly a net gain. And I don't deny they may have picked up some perverse incentives along the way. (For example, making a commission on each trade leading them to encourage churn over holding.)