Why are speculation and short-term trading considered bad in securities market?
Firstly, choosing to invest for the long-term can be a very good choice with good very good rewards for the given individual investors who decides to undertake it, who decides to undertake it after good amount of research. But interestingly, I have seen long-term investors describe their methods as the only rational allocation of capital in society, and that capital markets are somehow in need of long-term investors, because supposedly, they all will collectively make the best allocation of capital in society. I found these ideas to be very strange, because it seems certain stock market investors consider the benefit to a single individual investor to be the same thing as the benefit to society. Such ideas, obviously, are the result of “normative” thinking and people’s desire for a mystical sense of normalcy – which, in this case, is everybody benefitting from everybody investing for long-term. The problem with normative thinkers is that they never start by seeing why things are as the
