Definition of “secular” in the context of markets?
"According to Wikipedia: In the finance industry, something   done on a secular basis is done on a   long-term basis, not a temporary or   cyclical one, with a time frame of   ""10–50 years or more"" Source" Secular means a long term.  A secular basis is something done on a long term basis while a secular trend is a long term trend. http://financial-dictionary.thefreedictionary.com/Secular
I'm not 100% familiar with the index they're using to measure hedge fund performance, but based on the name alone, comparing market returns to *market neutral* hedge fund returns seems a bit disingenuous.  That doesn't mean the article is wrong, and they have a point about the democratization of data, but still. It's meaningful because we as a society have collectively decided that they are. It's all imaginary value, just like fiat money. That and in our capitalist society it is yet another product you are *forced to buy* or risk not having access to even a semblance of a decent life.  It's a pretty good racket if I do say so myself. I think this could be changed quickly if they were forced to participate in the markets.  Sadly I spent 3 years of my bachelors degree in finance studying EMH. Only in my last year, in two classes we covered the disiquilibrium. That value differs between a starving man and a man who never fears lack of food.  Let's take, instead, the value of your mother's affection.  Were you to have to pay for that affection, for her hugs, they would lose value.  Offering a price makes her affection worth LESS.  Therefore value is not tied to currency, nor is value indelibly tied to Capitalism.  Trading capital for your mother's affection negates the value of the affection. It just states that the price doesn't justify the valuation which is not a factual statement. Also this is based on someones opinion of the companies P/E. The P/E was published and public information and idiots on both the buy and sell side jumped in.   The article does not make a factual claim about Fraud (cooking the books), Francine McKenna speculates that management  and auditors cooked the books. Yes, and ..  how that _prevents_, abolishes, negates or in any way opposes what I've claimed? Markets are dynamic systems (they are after all multi-player non-cooperative non-zero-sum games), and as such they can have attractors (stable closed loops toward which the trajectory of (the state of the) system progresses, and if enters into, formally can't escape, since they are closed loops). Thus intervention is usually needed to *maintain* competition, which is called regulation.  Regulatory capture, abuse of regulations, abuse of regulatory power, and so on are problems in the greater model (in politics), where constant input sort of guarantees that it has no (stable) attractors, because as long people exist, at least some of them will have a habit of revolting.  The question is, is there a more efficient way to ensure existence of markets and ensure competition on them? And maybe some sort of anarchism is the answer, but sadly we're not doing enough experiments and research into that. "I had to look up the word contentious real quick. Thank you for that, added it to my lexicon!   That makes a lot of sense. Thus far, I was fortunate enough to only view videos from renowned economists and study from textbooks. I feel like this adds another layer to this entire field. Until now, all the problems  I read in the books were fixed, and under the assumption of the ""perfect market.""    I had almost forgotten that people react to incentives. (Advocate a certain stance because it's beneficial to you, not necessarily the majority) It's funny how learning little things affect so much of my perspective! Thank you." "Why do I like not having a planet 100% covered in salt water, with no land or fresh water? Gee, I am glad you had to ask.  Globalization has been happening since before the USA declared independence, it has been happening for the past few decades within the USA, and it has nothing to do with any type of market (free, capitalistic, socialist, communist, command economy). You can't credit ""capitalism,"" with the reason the USA was so fiscally successful, when there was gold, lumber, furs, practically free tobacco and cotton thanks to slave labor, etc. It was a free-for-all in the new world, and has grown exponentially, since.  I can hope to have a voice in whether we're living in the final 100 years of life on earth with dry land and clean air.  I am not going to be able to refute any economic philosopher taught in grad schools across the USA, whether they espouse a command economy, capitalism, socialism, anarchy, or any other option. I am sure you liked Ricardian Theory and your professor very well." The idea of a stockmarket is multiple people betting on the value of an asset and then getting paid the difference between their bet and the real value of the asset.  The goal being to keep the value of the stock as accurate as possible so capital is allocated to companies that will use it most efficiently.  The reward for people making these bets is a portion of that capital.    What you are suggesting is just a graph of the average happiness.  The difficult part of turning this into a market, is being able to assign value to happiness, value that you can gain or lose by choice.      Ironically, money is a indicator of happiness.  When apple came out with the iPhone, people saw it and decided it would make them happier if they owned it creating demand.  Investors noticed that people believed owning an iphone would make them happier so they bid up the price of AAPL stock.  People are happier with their iPhones and investors benefitted from this happiness and got cash allowing them to spend money on things to increase their happiness.    In order to extract happiness from the stock market a lot of other things come into play.  A biotech company curing cancer would be a solution to something that drastically decreases happiness.  Increasing alcohol sales might be a result of people trying to offset the sadness in the short term but in the long term it is a depressant and doesn't make you happy.  An individual might be happier with an extra $10B but overall 1 million people getting $10k each would increase average happiness much more.  But somebody like buffet can invest in companies that can generate way more happiness than just handing out cash.    The happiness report is an annual report of happiness.  Looking at these results next to the Gini coefficient (income inequality), and industry growth by country might start to give you an idea of what affects happiness.  For instance in Africa income inequality could sky rocket while the stock market plummets and happiness could still increase because of public health investments made years ago, causing the infant mortality rate to plummet.  If you want to think about this topic I recommend reading the great escape by Angus Deaton. Value is one area where economic theories tend to diverge and the (very) basic schools of thought both have excellent points in their favor. You've identified both here; one being that economic value can always be determined by net labor* or at least cost of inputs and the other being that economic value does not exist in and of itself and that only a market can determine value. In some ways it is just a question of world-view as much as anything but the concepts of natural prices or innate worth are difficult to argue against. At the same time, without exchange the concept of value has little meaning. So, as usual, it is some sophistry mixed with some sense.  Both have elements of truth and both are considerably more complex than they seem at first. Interestingly though, neither seems to work very well as predictive models despite providing the basis for some incredibly complex and interesting mathematical workups.       * Note that net labor is the sum of ALL labor involved and is incredibly difficult to quantify accurately. I think you're over complicating it! There is the market maker in the pure sense as what chilldontkill said - a bookie, a middleman. They are just the brokers in between the buyers and sellers, and they simply make profit off of the spread differential.  But market maker is also used to refer to large, high volume buyers and sellers that can influence the price because they control a larger % of volume. These only really exist on low volume products, and they slowly ween out the larger the volume. On higher volume products, I like to refer to them as institutions - that is, well informed, large pockets - whether is be central banks, clearing houses, hedge funds, boutique firms. These are the people who are generally in the know and they often bet against eachother.hope this helps ... Wait... You mean that the government interfering with the market was a net negative?!  It's almost as if the government is full of humans, who, by nature, are short sighted and only concerned with being re-elected.  What could possibly go wrong by allowing them to meddle in the markets? Yes, it's a term in economics. It is the economy that affects goods and services, and so the vast majority of the economy.   It contrasts with the paper economy, which is what goes on in the financial sector and speaks more about the virtual value in bonds, financial instruments, and shares. Hey thanks for your response.  The commodity is actually electricity, so definitely not able to store.  Would you mind giving me a short summary of your thought process or an example of how you compare liquid markets vs illiquid ones when looking at more traditional commodities?  If that is a bit much to ask, as I am sure it could get quite involved do you have any reading recommendations?    This little project has sparked an interest. "If you have already maxed your TSP contributions, the ""401k"" for military folks, you could consider a Traditional IRA contribution. They are tax-deductible, based on some limits, so it may reduce your tax liability. Many online services (Vanguard, Fidelity, etc.) offer quick and free setup of Traditional IRA accounts. If you have already maxed the Traditional IRA as well, you could look at making taxable investments through an online service. Like homer150mw, I would recommend low-cost funds. For reasons why, see this article by John Bogle."