BUSI 4502 Lecture Notes - Lecture 12: Capital Formation, Insider Trading, Fiduciary
30 Aug 2018
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Document Summary
The recent financial sector reflects two different cultures and lost the optimal balance between both cultures. The two cultures are the detriment of investing public and the benefit of financial sector participants at direct expense of their client. The issue being addressed in this article is regarding the increase of speculation over investment in the financial markets, which is the conflict of increase of culture of science and culture of humanities. Investors focus on the short-term profit as compared to the long-term investment. Their capital is valued in the marketplace but not by their shareholders. The increase of speculation and trading derivatives was mainly due to institutional investors like hedge funds, pension funds and mutual funds due to more sophisticated technologies. Money has resulted investors being a hypocrite in the financial sector. Speculation has resulted in draining the resources of investors as a group. Leaders with integrity and wisdom is required to maintain the balance of both cultures.
