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its only productive value is in providing an out to the original investor
That's the whole point, though. If there was no secondary market for capital it would be extremely difficult for any company or venture to raise primary capital. It's got nothing to do with derivatives.
NickCJ-
+1
I didn't really understand how derivatives came into it.
Very large public companies often issue more shares and people buy these for the dividend income on the strength of their previous* history of distributing dividends rather than mad gainz.
*not talking about past performance, but some companies tend to do dividends more than reinvesting.
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I guess my quibble is more that we casually call it “investing”, rather than something else entirely. Not that it’s not useful, or anything like that.
hugo7
slippers
There’s a peculiar idea that buying stocks and shares is ‘investing’ though.
The only person who invests is the first person to buy stock in a company. The second-hand market is purely speculative, and its only productive value is in providing an out to the original investor…