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Corporate IrresponsibilityAmerica`s Newest Export$
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Lawrence E. Mitchell

Print publication date: 2001

Print ISBN-13: 9780300090239

Published to Yale Scholarship Online: October 2013

DOI: 10.12987/yale/9780300090239.001.0001

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PRINTED FROM YALE SCHOLARSHIP ONLINE (www.yale.universitypressscholarship.com). (c) Copyright Yale University Press, 2020. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in YSO for personal use.date: 21 October 2020

Traditional Stockholders: The Night of the Living Dead

Traditional Stockholders: The Night of the Living Dead

Chapter:
(p.135) Chapter 6 Traditional Stockholders: The Night of the Living Dead
Source:
Corporate Irresponsibility
Author(s):

Lawrence E. Mitchell

Publisher:
Yale University Press
DOI:10.12987/yale/9780300090239.003.0007

This chapter analyzes the relationship between corporate irresponsibility and traditional stockholders, and discusses a study which reports that there are approximately 50,000 people engaged in day trading every single day. These investors have a profound effect on stock prices and market volatility, trade solely on rumor and volume, and care nothing for, and know nothing about, the corporations in which they invest. The chapter discusses the idea that modern finance theory supports the thinking of day traders, at least to some degree. The theory holds that corporate stock is nothing other than a measure of its risk in relation to that of other stock, and that the way to handle this risk is to develop a diversified portfolio of securities. The chapter also analyzes the role of the equity markets in detail.

Keywords:   stockholders, trading, market volatility, stock price, finance theory, securities

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