Originally Posted by Frisco
Monetarily there are many types of acceptable gambling.
Wall Street is the Grande Casino of the East, attracting players world wide and with deeper pockets than many who go to Vegas. The system in Vegas seems more fairly operated than the Stock Market, but with much less a potential return on your dollar, of course.
But it's a gamble, and the Market players know it.
To a point, I'll agree with you, Frisco.
When most corporations go public, they want to sell stock. They want investors and their goal is to build a better widget powered mouse trap. They are not out to steal from investors. Granted, some are fraudulent from the beginning, that is a fact indeed. Sometimes they succeed and sometimes, they fail. When you buy Apple stock, you own part of Apple. Own enough Apple stock, and you can have a say in how the company is run. Generally speaking.
Vegas is driven by dollars. It was created in the desert by mobsters with a dream and a theory called "The greater sucker theory." Oddly enough, Mobsters did not like their customers taken advantage of so the large casinos were (more or less) fair. For the most part, they did not need to cheat. Get caught rolling a customer and the dealt with you. No courts, either.
Mobsters had a great run. Sadly, Vegas has become Disneyland and for many, it has lost much.
Math decides which games live or die. The house always has an advantage because it can be no other way. Except for card counters. The good ones if left to run free, can legitimately break the house. This is why you are "asked" to leave the casino if you are a card counter. And your face and name go into a little book so you can't play in any other casino.
Over the long run, eventually, most will loose. This is a mathematical certainty. Even though casinos have a high payout percentage depending upon the game. A casino might tell you they have a 95% payout. Most people think they understand it, and the casinos know that over the long run, the percentage is good enough.
These days, we have lots of people creating financial instruments that defy understanding. For example, Derivatives. Largely unregulated and even hard-core financial professionals do not fully understand derivatives. I recall reading that you can't know at any specific point, what they are worth. I think 60-Minutes did a piece on them and they are scary.
Part of the problem with some mortgages was you could lend money to unworthy borrowers and it did not matter if the loans went bad. You could sell the loans in packages to others so there was no real downside for the lenders.
For many people, stocks can be a gamble, I'll agree. When we went public, everyone was given shares. When the price went up a nickle, people were beyond happy. When it dipped a few cents, they were sad. Some were worried because they saw no movement after the close, not knowing that trading closes every day around 4:00.
I live in Utah and we were once known as the "Penny Stock Fraud Capital of the World." Lots of people seeking fame and riches trusted con men that setup companies specifically to bilk the rubes. Primarily, mining stocks and especially uranium.
Some made a little money, most lost allot of money, promoters bought huge houses.
As an aside, you might look into Charley Steen. He set the bar as far as defining colorful characters. In the hey day of uranium mining and he made and lost millions.
Another aside, I know of a man that made a huge fortune selling busted, closed, useless, worthless, defunct corporations. He bought them and sold them to legitimate corporations that could buy an existing company and avoid the red tape and huge pile of paperwork required during our history when reformers were trying to prevent future frauds. Not illegal, but one artifact of the crazy markets Utah once enjoyed.