Some time ago – and against our better judgment – we took a small amount of money that had been given to us after the birth of our older daughter and gave it to a financial planner to "invest" it, thinking that by the time our daughter was considerably older, there might be enough there to constitute a "college fund" or something of that nature.  Shortly after the investment was made, the market took a turn for the worse and we lost quite a bit of the small sum that we had put into this scheme.  For several years, the account balance moved just a little up and just a little down and when our statements arrived, we would always have some kind of quick but inconclusive discussion on whether or not to pull the money and place it into a more stable account, such as a savings account or a CD.

Somewhere along the way, I came up with the idea of moving the money around myself and trying to make some kind of "clever" investments that might give us enough of a short-term gain to make up most of what we lost so that we could pull the money out with little or no losses.  Most people who know me well know of my contempt for "The Market" and it's fair to say that the very idea of me engaging in some kind of stock trading is akin to a vegetarian eating a hamburger.  Nevertheless, I was willing to give it a go one time if the end result was that we would be in a good position to take everything out in short order with a minimal net loss.

Over the course of the last few weeks, we had a small amount of the money shifted to an online brokerage account so that we could make investments as we so desired. The set up works kind of like E-Trade, except the trading fees are something like 3 times more than E-Trade or Scottrade.  Not that trading fees would be a big deal, though, as we were only looking to make a few key purchases.  The first purchase I had counted on was the much-anticipated Vonage IPO which seemed very promising to me based on several conversations with others as well as a bit of reading that I had done on the matter.

I was a bit taken by surprise on Tuesday morning when I learned that the IPO would go ahead the same morning and I hoped to buy some shares as soon as possible.  Later that morning, I logged into our account and prepared to make the purchase, but right before I clicked on the "buy" button, I noticed something curious: The stock had already dropped from 17.0 to below 16.0 in just a short time on the market.  I held off  – thankfully – and watched Vonage tank throughout the course of the day.  By the market's close, the Vonage IPO was being billed as the worst market debut in 2 years.  At the close of the market on Friday, Vonage was hovering around 13.0.

This experience has, by and large, confirmed all of the ill-ease and suspicions that I have harbored for some time regarding "The Market."  Most of the little that I know of economics and the market comes from the brilliant but incomplete work "What is Economics?" by Rosa Luxemburg.  In this text, Luxemburg plainly states the true nature of the market in language that is as true today as it was when she wrote the words almost a century ago:
Rosa
Rosa Luxemburg
Today, a person can become rich or poor without doing anything, without lifting a finger, without an occurrence of nature taking place, without anyone giving anyone anything, or physically robbing anything. Price fluctuations are like secret movements directed by an invisible agency behind the back of society, causing continuous shifts and fluctuations in the distribution of social wealth. This movement is observed as atmospheric pressure read on a barometer, or temperature on a thermometer. And yet commodity prices and their movements manifestly are human affairs and not black magic. No one but man himself—with his own hands—produces these commodities and determines their prices, except that, here again, something flows from his actions which he does not intend nor desire; here again, need, object, and result of the economic activity of man have come into jarring contradiction. *

We are not sure what we will do with our small sum for now, but we have surely dodged a tiny bullet through this experience and in doing so, we have learned a great deal. Many others have had to endure complete financial ruin because they played the market and lost.  The apparent truth of the matter is that "The Market" isn't designed for the benefit of working people; it is manipulated in spite of them.
*  "What is Economics?" is available in the Pathfinder Press compilation Rosa Luxemburg Speaks.  It's really too bad that this fantastic work is not available for free on the Internet.