Why do people get so into the Stock Market?

Question

I have a MBA (or I'm about to anyway), and have taken numerous finance courses. All these Math models that are used for finance are a total crock. Yeah, you can diversify your stocks, but it's still gambling. PE Ratios don't mean jack. It's all random and risky. IT seems the only way to win is to do insider trading. So why do people bother? Why won't our companies and the Government allow us to invest our retirements into our houses? That's a lot less risky than some poorly run mutual funds that are charging me a butt load of money on hidden fees for their services.

Answer 1

I'm assuming in an MBA program you don't learn very complex equations in regards to finance, so I can see how you would think they are crocks of ****, esp. in this day and age. As a student studying higher level finance right now, I can tell you those crackpot concepts will get built upon to a level where they make practical sense, once you understand the complicated mathematics behind it that is lol. You'll need differential equations, linear algebra, and calculus based probability before you can do that though lol


But I agree for the most part though, since the mid 90's, I believe it was somewhere between 70-80% of all mutual funds failed to beat their respective benchmarks.

Answer 2

We all know of, or have heard of, people who amassed fortunes, large and small, by doing nothing more than investing in the stock market. (Forget for a moment those we know of who lost significant amounts investing in the stock market.) Rest assured that the market mavens did not apply the mathematical formulas taught in finance courses; that is not the way to amass wealth. They used their minds, they applied investment concepts that worked, they discovered that they had a flair for stock picking, they were not reluctant to assume some degree of risk. Such an approach did not require them to punch a time clock, or go to work every day, or sweat under a hot sun, or take orders from a boss, etc., etc., and so forth. It makes for a very pleasant kind of existence - when it succeeds. (Forget for the moment those who fail at it.) The lure is intense. The motivation is strong. It is, in a sense, easy money. So is gambling if you win, but in gambling the odds are always against you. The stock market appears to be the most accessible way for an (above-) average person to become rich. That, in my view, is why people get "so" into the stock market.

Answer 3

There are a lot of mutual funds out there that are NOT "poorly run" and do NOT charge a butt load of money on hidden fees. Its not all random and risky. Instead of math based tech analysis, read a book about Warren Buffet's methods. He has made a pretty good amount of money buying shares in good businesses.

Answer 4

i use my money as "experiment money, which won't impact me too much if I lose it all." I don't settle for $20,000 gains. I buy companies that have huge potential in a growing industry and haven't been recognized yet. Some of the stocks I have been trading are 1) GZFX, a company similar to netflix, that rents movies as well as games currently trading around $0.0015. I own about 7 million shares in this company and even if this stock only gets to 15 cents (which it has reached before), im a millionare.2) RHWC, (see http://www.undervaluedpennystock.com/) this stock is expected to make 750M dollars in profit this year and is trading at around 15 cents per share. i hope this helps.

Answer 5

Why dont you ask ?? Warren Buffet,,,Brookshire Hathaway!!