An efficient way to allocate idiocy

A good amount of data now shows that most investment professionals have absolutely no idea what they are doing.

Illustrative stock photoIllustrative stock photo (Source: AP/TASR)

People used to invest in companies that looked to have promising futures. Issuing stocks was a way from companies to access capital they need to grow, and a way for the average person to make money with money. Instead of burying your retirement savings in the backyard, you could essentially loan the money to Coca-Cola, watch it grow and then withdraw it in the future.

But that’s not what happens anymore.

These days, CEOs receive a good share of their salaries in the form of stock and bonuses. They are thus incentivised measure profits by the quarter, rather than the year or decade. While they are not mutually exclusive, short term profits paid out to investors in the form of dividends, and sustained growth are not the same thing either. Rapid stock trading on computers have further changed the game, buying and selling shares by the millisecond.

The rest of this article is premium content at Spectator.sk
Subscribe now for full access

I already have subscription - Sign in

Subscription provides you with:
  • Immediate access to all locked articles (premium content) on Spectator.sk
  • Special weekly news summary + an audio recording with a weekly news summary to listen to at your convenience (received on a weekly basis directly to your e-mail)
  • PDF version of the latest issue of our newspaper, The Slovak Spectator, emailed directly to you
  • Access to all premium content on Sme.sk and Korzar.sk

Top stories

News digest: New travel rules become effective, more foreigners can sign up for vaccination

The appellate proceeding in the Kuciak murder case starts tomorrow. Travel map changes. Registration for Covid vaccine now open to more foreigners.


11 h
Jan Herak

Slovakia’s “me too” moment? OĽaNO MP quits parliament

Ján Herák faces a series of serious sexual abuse allegations, while a similar case hits a rising star of Czech politics.


15 h
Robert Fico surrounded by his Smer MPs.

Robert Fico's Smer has gained its best result since last summer (+graphs)

Several coalition parties struggle with support, unlike the opposition, according to the June poll by Focus.


18 h
Branislav Zurian

Charges against former elite police head dropped

The prosecutor found the decision to prosecute Branislav Zurian unlawful, unfounded and premature.


17 h