In defense of Day Trading

pkjha30

Well-Known Member
#1
January 25 speech in Tokyo
Vice Minister for economy, trade and industry Takao Kitabata described day traders as "a typical example of the most disgraceful shareholders.They have no interest in management at all .They are stupid, wanton and irresponsible. Therefore, you don't have to provide voting rights to them."

Day-trading, or buying and selling in the course of the day, has been rising in popularity in Japan as the Internet allows anyone to play on financial markets.
Well I am not a day trader. But any person endowed with little intelligence would recognize the idiocy of above remarks.

It is true that day traders have no interest in management at all. But except promoters and few other groups how many investors have any idea about management or how much do they care about management. If they care about management, how much are they able to influence its policies or course of action?? May be while buying and selling reputations of management are factored in.But beyond that??

To do day trading one needs to know a lot about market, bear lot of stress, follow various trends and do technical analysis before any stock is picked. This job is certainly not for stupid .

If one wants to earn a living by day trading that can hardly be called wanton or irresponsible.

Are they really interested in voting rights?? I bet they are not. Don't know if companies could invite them to vote in their affairs held quarterly / bi-annually or annually. May be it is after all not such a bad idea. Management will be on tenterhooks daily and be on guard against any bad decisions on day to day basis rather than voting investors visiting Annual Conference once in 5 years and endorsing management decisions as fait-accompli.

If Japanese Minister is showing such remarkable lack of understanding of Economy Industry and Market, does he really deserve that post? May be he should be asked to reflect more on these things before being allowed to run the ministry.

No wonder with people like this at the helm of affairs, japan is under prolonged bear market and investors may have little faith in their market's ability to prop up their income. And hence even house wives are turning day traders. Also major hedge funds from Japan trying to palm off growth economie's income to arrest their growing economic irrelevance.


As far as my little knowledge goes, Day traders do provide a useful function of providing liquidity in the market. The stocks which are not day traded, are difficult to sell off when you (I mean investors)need monies.

This is the single most important function of day trading:- Maintain liquidity in stocks.

Whereas Investors provide stability and depth to the market.

Purpose of each segment of Market is different but they complement each other.

Pankaj :)
p.s. Kitabata later apologized for his remarks, saying: "I raised some inappropriate examples. I will reflect on them."
 

beginner_av

Well-Known Member
#2
the said person's lack of knowledge is astonishing. tell him about STT and how much day traders pay per day! may be japan's recession would have ended earlier.
 

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