>The few times I owned stock, it didn't seem to me that I owned
>any part of the capital stock and profits it produced.
>
>I read your book, and I think I understand the use of stock
>to mark ownership, but at my level, "ownership" is so
>attenuated it doesn't seem like ownership at all.
>
>I can't walk into a company and give orders like an owner
>can. Not with my couple of hundred shares.
>
>I may share in the profits, but then I may not. The officers
>seem to me like a nomenklatura class looting the profits. By
>the time they're done there isn't much to share with me.
>
>Maybe I'm dumb but I don't understand stock. I just plain
>don't understand what I'm getting for my money. Bonds, ok,
>I have an intuitive sense even if I'm not good at articulating
>it, of what I'm buying. But what the hell am I buying with
>stock?
>
>Even if the officers aren't looting the company (and I think
>many are), how can I get a return that is worth the risk at
>today's stock prices in reasonable time? It's impossible, no?
>
>What am I missing?
Over the long term, stockholders have averaged 7-10% annual real returns; over the last 20 years, it's been half again as high. Prospects over the next few years probably aren't too good, but over the long sweep of things, people who own diversified stock portfolios have nothing to complain about.
Rentiers have bellyached about officers looting "their" companies for a couple of centuries. Starting in the late 1970s, they got organized about their complaints, fueling first the leveraged buyout mania, then pension fund activism. All the "unnecessary" expenses, like above-minimal wages and fringe benefits were cut. Workers lost, rentiers won. Your couple of hundred shares don't matter much next to the vast gobs of them held by institutional investors and the very rich, though.
Doug