The current meme stock craze is yet another example of the sad propensity for human beings to gleefully rob Peter to pay Paul, Paul being themselves.
If one purchases a stock that has social media hype but little or no real value, then one is betting that latecomers to the FOMO hysteria will fund their good fortune. When there is no real value or profit created by the company, then the appreciation of a stock and the profit reaped by early investors is the money lost by later investors. In the long run, if the company is not growing or creating value, or if the stock is merely a fad, then the price will drop and the latecomers will lose money. This is no different than going to a casino, where there is a zero sum game and for every winner there will be a loser (and if you count the casino's take, then there will ultimately be many more losers than winners).
One may argue caveat emptor, but is benefiting from the misfortune of others an ethical act? There are many investments available that allow one to slowly acquire wealth through the success of a company that is creating a valuable product or service, an investment where all investors are likely to benefit. The reason that meme stocks are so popular is simply because they offer the tantalizing prospect of immediate large gains.
This is the same impulse that has driven every gold, silver or diamond rush throughout history, every treasure-seeking voyage of discovery, and every frantic purchase of powerball tickets.
This obsession with lottery style winnings is a more dramatic example of a broader human trait – the selfish hoarding of good fortune. If I happen to discover oil on my land, do I deserve the wealth that it brings, or should I share it with others? If I am born into a stable, wealthy family in the richest country on earth, should I find a way to help others in less fortunate countries or circumstances? Or should I build a wall around my country to make sure that my good fortune is protected? If I am endowed with intelligence and good health, should I be motivated to share my good fortune with those who are less able or who suffer from maladies of various types?
These are difficult questions. The disparities in good fortune in this world are overwhelming and they are made more complex and sometimes intractable by the economic and political circumstances that surround them. But it is perfectly clear that much if not all of our ‘good fortune’ is undeserved in any absolute sense, and that some measure of kindness, and generous sharing is incumbent on us.
How seriously we take that obligation and how far we go to respond to it is an individual choice that each person must make. Few will choose to sell all their possessions and give the proceeds to the poor, as Jesus suggested to the rich, young ruler. But the world would certainly be improved if all of us acknowledged the role that ‘good fortune’ has played in our lives and took measures to even the playing field. And I am pretty sure that buying meme stocks is not one of these measures.
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