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There Are No Investors Left, Only Speculators

Mr. Bogle, an invalu­able voice of rea­son for investors over many years, sug­gests that there is too much spec­u­la­tion in our equity markets.

Click here to see the short interview.

His com­ments jibe entirely with my post, Rise of the Spec­u­la­tive Move­ment.

His asser­tions are backed by excel­lent stats:

  1. SPDR S&P 500 (SPY) turns over 10,000% per year
  2. Mar­kets direct $200 billion/yr to new invest­ments com­pared to $40 trillion/year in trading

To the extent that invest­ing is sup­posed to be the process of direct­ing “cap­i­tal to its high­est and best use”, our finan­cial sys­tem is clearly fail­ing soci­ety while, quite mean­ing­fully, enrich­ing the mid­dle  men, i.e. Wall Street.