Short-sighted stock markets

Stock markets were once meant to allow the bright meet the rich. By bringing together people who had bright ideas and no or little money with people who had some money for which they couldn't think of any other use, the markets allowed enterprises to be founded and expanded.

Back then, investors invested in companies. They bought shares in anticipation of receiving a piece of the company's future profits. And they usually had at least a rough idea about the business "their" companies were in.

Nowadays, this is no longer the case. Most investors are only concerned about how their stocks are doing; they don't really care how -- and often don't even know what -- the companies they own a share of are doing. The stocks no longer represent corporations, they've started a life of their own. The means have become the ends.

In the fast-paced action of today's stock market, the sights are set short: a broker has to focus on what's going on now, leaving long-term thinking to scientists and philosophers. You don't need to stick with the company to enjoy the benefit of its ability to create value -- you sell on the day it announces a bad quarter, and buy something else that is expected to go up.

"Microsoft's stock closed at $24.15, down $3.10 a share, or 11.4 percent, after the Redmond software company indicated plans Thursday to invest more in its businesses — including a battle for the Internet with Google and Yahoo! — at the expense of higher short-term profits," writes Benjamin Romano in LA Times.

And, while juggling their money where it grows fastest, the stock players -- or at least the smarter-than-average ones -- earn much more than the companies whose shares they buy and sell.

Innovation? Who cares! The future is now!