The “democratisation” argument that we need to open up stock markets to EVERYONE on the grounds of socio-economic equality (or even worse, private markets) annoys me a little. 1/n

Yes, the stock market is a great way of compounding savings. But social democrats that think broadening and unrestricting *direct* access to equities is a way to lessen inequality should IPO whatever they’re smoking. 2/n

The stock market is an efficient mechanism for transferring money from "dumber" people to "smarter" people. Obvs dumb people can occasionally make a killing & smart people have their faces ripped off. But over time youd expect the zero-sum game to be won by the latter.

If one is serious about addressing inequality, *look at the tax code and investments in education.*

Don’t actively encourage people to punt on stocks, for gods sake.

A lot of people will indignantly reply to me saying “how dare you elitist snobs pull the ladder up!”, or something words along the lines of “I have proven it can be done!”

1stly, this is not a ladder many people can seize, and many that do will find its been oiled. The neediest people have no money to pump into Tesla calls. Most of those that do will discover why the finance industry is quite keen on getting more retail money into markets.

2ndly, sure, some people - pros and amateurs - will have great track records to point to. But every single serious study for the past half-century has shown that even pros on average & over time do worse than the broader market, and individual investors get brutalised by it.

Even a buy-and-hold strategy for individual stocks is fraught with risks. As Bessembinder pointed out in his seminal study, just 4% of US stocks explain ALL the stock market’s gains since 1926. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2900447 8

It’s similar for global stock markets. And remember, every one of other these other companies had millions of investors who believed they would do better than Treasury bills. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3415739

In other words, if you stumble over one of these companies then you will be a winner, but at the risk of literally talking my book, it’s better for 99% of people to just “buy the haystack” rather than try to find the needle.