Actually i believe stock market is so high and ‘rewarding’ due to the speculators but it doesn’t exist just because of speculators. If there’s no speculator (which will never happen), stock market will still be there but maybe it’s not as interesting and appealing to others. It could be just another thing that nobody wanna look at.

For me, stock market provides an easier way for investors to invest in the businesses they like and know. And this is particularly useful for small time investors. Without stock market, it’ll be harder to invest in a company. That’s as far as i know anyway.

If you studied Wall Street’s history, you’ll find it grew from speculative activity since the 1920′s. They invented margin financing and contra trading to enable everyone to speculate, including the poor. They were feeding stock prices to ticker tape machines in salons so the ladies can play the game while getting their hair done. Speculation created a new wealthy class. The rest of the world loved what they saw and followed suit.

During the 1929 crash, thousands of speculators committed suicide but as you know nothing attracts people like the smell of money and the situation really hasn’t changed today. Stock markets exist for speculators. I say that becoz you don’t actually need a stock exchange to invest in a company. That’s why without speculators and short-term loans to encourage speculative betting, I think these exchanges will die.