With Enron, Worldcom, AOL, Qwest, Tyco, ImClone, Dynegy, Global Crossing — and, as of press time, every other corporation in America — embroiled in scandal, many potential investors are turning away from the stock market, choosing instead to invest their money in pants. This is undoubtedly sound; every occasion demands the wearing of pants, be it a ritzy affair or a night out with friends. For the few moments where pants are not required — lovemaking, eating dinner over the sink, and watching Fashion Television being first among them — the threat of pants-wearing to come is nonetheless a pressing concern.
Not that any of this has anything to do with the stock market, of course, which involves numbers and is ridiculously complicated. Still, though: do you have enough pairs? Is your money so precious?
Please think about it. On to stocks.
What Are Stocks?
Let’s say I buy a pear for a dollar. The pear is both sweet and delicious, but for the purposes of this metaphor let us assume I don’t eat it. As time passes, the pear rots and decays, becoming very unsweet and not delicious. At this point, I could throw away the pear, cursing myself for having not eaten the damn thing just to forward the cause of a silly metaphor. But instead of throwing it away, I incorporate the pear and gather a ludicrous amount of investment capital by pushing Pear Incorporated as small-cap IPO growth stock. My many investors sit and wait for the pear to mature. And of course it will, though this doesn’t change the fact that it’s now foul and completely worthless. I cash in my shares and wire the swindlings to an off-shore account, then move to a tropical island, where I live out the remainder of my days having drinks served to me by almond-skinned girls in coconut bras, later to be fellated by same. This, in essence, is how stock works.
What’s a Stock Market?
A stock is an opportunity for somebody to sell somebody else “pieces” of something which hold no value; pieces he or she would otherwise keep if it had value. A stock market is the place where this piece would be sold. And while this sounds surprisingly straightforward, it naturally is not. For one, some stocks are listed on the exchange, and some aren’t. This is decided through high-stakes dart games, the rules of which are too complicated to get into here.
Additionally, one is not only free to buy regular stock, but also futures. Investing in futures is a method of insuring that you can purchase make-believe stock at a certain price in the future. It is much like insuring oneself against a dealer’s potential 21 in blackjack, in that it is a fool’s game.
To add to the confusion, anyone attempting to buy stock at a stock market is required to sport rolled-up shirt sleeves, sweat profusely, and holler numbers at someone standing on a desk. The person standing on a desk then points a pen at the stock-buyer and screams at him, at which point he is free to go home to his loveless marriage.
If all of this sounds incredibly confusing, don’t despair. Stocks and the stock market are purposely confusing, so as to keep out undesirables. Yet none of it is terribly relevant when compared to the simplicity of the stock market itself: a bunch of white guys attempting to make scads of free money off other white guys. The primary rule of the stock market is to buy low and sell high, a simple enough rule. However, for the rule to work in any meaningful way, there must be just as many people willing to buy high and sell low, or else the entire system falls to its knees and spasms embarrassingly. For all the disorienting “NASDAQ”-this and “Dow Jones”-that talk, what the stock market essentially boils down to is a profoundly high-yield game of hot potato. In order for traders to make money off their low-bought stock, there must consequently be some podunk sap willing to buy it off them at a jaw-droppingly high price. This is where you come in.
What’s a Corporation?
If I buy a store, put up money for supplies and employees, and sell products or services to the public for a profit, I’m a business. If I raise money for a store through the stock market, sell off ownership of the store to twenty shareholders — none of whom can make a decision independent of the other nineteen — then deflect any liability for my products to a fictional entity composed of disinterested third parties, I would then have a corporation.
In simple terms, a corporation means that when you buy a toaster, and it doesn’t work, and the warranty is only good in five states, and your receipt was printed with cheap ink and isn’t actually legible, and when you dial customer service you get put on hold and, after listening to dead air for five minutes, get cut off — it isn’t actually anybody’s fault. It’s the corporation’s fault. And the corporation doesn’t exist, in a strictly physical, “I-am-going-to-beat-those-responsible-to-death-with-this- toaster-that-cannot-toast-bread” sense.
So What’s The Deal With Enron, Then?
There are of course many intricate and complicated reasons why corporations commit crimes, but as a simple answer, keep in mind that corporations are purest evil. The seeds of the Enron scandal were first sown in the late 80’s, when vacuous presidential gunslinger Ronald Reagan approved gas and oil deregulation, lifting controls on who could produce energy and how it was sold. Enron was first through the gate in a long line of corporations willing to exploit this like a blonde Iowan drama student. With energy privatized, Enron was free to monopolize it, often tripling costs in areas suffering energy crises.
Additionally, the fledgling corporation was free to manipulate the market as it saw fit. For example: Dumbshit Gas Company takes an ass-beating in profits if a winter is mild, as people won’t need gas to keep warm. So they trade futures (i.e., get future energy prices locked down) with Enron, the only game in town, to ensure that a warm winter won’t kill them off financially. BilkedHuge Electricity Company, conversely, fears a cool summer for the exact same reason, and trades futures with Enron, the only game in town, so they won’t get molested like choirboys if it gets a little chilly come July. Enron then makes money no matter what happens — because they’re the only game in town, and because they manipulated their prices enough to stir up problems in the first place.
Ah, good times. It’s not illegal, of course. Because capitalism works like my Uncle Doug does: In other words, seldom, and only for pot money. Is Enron evil? No. Enron got caught. There’s a moral here: if you’re rich and you don’t care a damn about anything but your own bank account, don’t get caught.
But Enron Did Get Caught, Didn’t It?
Oh yes, it did. As the whole world now knows, Enron cooked its books to a frothy boil, siphoning off substantial losses to make-believe “partnership” companies in order to hide the beating they took in the dotcom industry, among others. Enron was of primary importance because, once again, they were first out of the gate — this time as a wake-up call to investors that they could lose their shirts. Ironically, once Enron was outed, many other billion-dollar corporations, such as WorldCom, also stumbled — proving once again that there is no justice as swift as that which the American public is currently interested in for the next 15 minutes.
What made the story truly newsworthy, of course, wasn’t the fact that a billion dollar corporation had committed North American ass-sized fraud. No, what plucked our heartstrings (again, for fifteen minutes) was the human element. Joe and Jane EnronJob had devoted monthly stipends to their 401(k)s, investing their savings in the future of a company that, ultimately, didn’t have one. While Enron’s CEOs sold off their company stock in fat fistfuls, the employees were denied that same right, and lost a bundle. Much like a cute baby bear cub who watches as a small fire spreads to a pile of leaves, then hours later engulfs a tree, then over a period of days consumes the entire forest, the average Enron employee — sitting in the epicenter of the corporation’s day-to-day business and privy to all of its dealings — did not realize there was a problem until it was too late. People throughout America shed a tear for these poor brave souls, who, discerning Enron’s imminent collapse months ahead of anyone else, were unable to pawn off their worthless stock on unsuspecting people for profit. Luckily, the victims who had huge racks were able to sell naked photographs of their huge racks for money — yet America weeps for the flat-chested among them (for many reasons, many of them self-evident).
So how, you may ask, do you avoid a similar fate? By asking yourself some important questions. Firstly: does your company suck? Secondly: are you giving it money? Thirdly: if your company sucks, stop giving it money.
So What Should I Invest In?
Clearly, in pants — the clothing accessory for all seasons. Other than that, the only option available to you is getting yourself an organic hemp poncho and divesting yourself of capitalism entirely. But since this necessitates you becoming a filthy hippie, it is not recommended. Instead, consider investing your money in extremely high-risk stock in the hopes of winning big: namely, lottery tickets. Brokers advise investing heavily in Fantasy 5, which is presently enjoying a bull market share, and is paying off huge dividends to one in every sixty million investors.