People like to pretend stocks are some kind of scheme by the big bad CAPITALIST MACHINE to oppress the workers and enrich the wealthy but that’s not what the stock market is about. It’s what happens when people who have no idea what they’re doing throw their money into financial products and lose everything, but whether you know it or not, your money is probably tied to the stock market at some level. The profit you make at the stock market is directly tied to the amount of money you’re risking, and the amount of risk you’re willing to accept. No risk means no reward, lots of risk means you can be billions in the hole.

Stocks are essentially lending money in exchange for a tiny bit of a company. If the company does well, you get paid back an amount depending on how much of the company you own. You can sell that bit of the company and then someone else will get paid instead, but you get to keep the money off your sale. You usually also get to have a say in how the company works if you own enough stocks, as you own part of the company now.

Selling stock allows a company to expand more than if it had to slowly save up its profits. You can only mortgage your assets once, but as long as you can convince people to lend you money, you can make money with stocks. The more a stock is worth (=the more trust existing or prospecting lenders have in you), the more likely people will be willing to buy parts of your company.

By not selling every part, or keeping a small set of parts for employees, the company can also directly profit off of price increases.

There are also companies like co-ops where the workers all own part of the company. That means they get a say in how the company is run, as the workers collectively have more power than even the CEO, for better or for worse; convince the majority of a terrible business plan and the entire coop goes to hell, even if the CEO warns everyone about how bad an idea something is. On the other hand, when someone tries to cut costs by doing mass firings, the workers can come together and put a stop to that. This also motivates workers, as the stock they get paid is worth more when the company is doing well. This doesn’t have much to do with the stock market, as these stocks usually aren’t traded publicly, but it’s just an example of stocks being used to improve the position of the working class. Unfortunately, co-ops like these can’t use stocks to attract investment, so these companies don’t grow as much, and you don’t see too many of them as a result.

You can do a lot of things with stock if you enter the stock market. Most of that is actually contracts about how you’re going to treat a stock you own or want. For instance, you can borrow a stock from someone else for a modest fee, sell the stock off, wait a bit for the price to drop, then buy it back, pocketing the difference. If you misjudge the price difference, you end up paying more than you’ve sold the stock for.

You can also do the inverse, basically buying someone’s promise to sell you a stock for a certain amount of money in a certain amount of time, hope the stock is actually worth more than what you’ve paid by the time the exchange happens, and get expensive stock for cheap. Once again, this can lead to a situation where you make a loss, for instance when the stock drops in price and you’ve paid more than if you would’ve bought the stock directly.

It’s basically all betting and betting on other people bettings. Making money through normal stocks takes a long time, as the company you’ve bought stocks of may take years to reach the growth you’ve funded, and these bets can make you a lot more money in a shorter amount of time. However, you’re not obligated to do anything crazy with your stocks; you can just buy them, hold on to them, and make a small profit over the money the company pays back.

Companies that don’t sell stock and still compete with stock based companies often have other investor deals. Without these kinds of loans from people with free capital, it can take decades to collect enough money to pull off growth that would take a year with stocks or other loans. If you’re starting a business, they can help you achieve your goals and bring your products and services to everyone for affordable prices. If you’ve got more money than you need, you can use stocks to help someone else get their business running, and you get a bit of cash in return. If you think you’ve got a good idea for how to run the business, you can buy a significant chunk of stock and weigh in on how that business can work best.

Stock also has another upside: the stock market allows you to take money you have pooled (be it retirement funds or just some money you’ve got floating in your bank account) and invest it in some safe bets which make about 2 or 3 percent profit over a long time. If you don’t do that, the amount of money you’ve saved will remain the same, but because of inflation, that money will be worth less over time. A million dollars was enough to retire on a few decades ago, but if you’ve saved a million and stopped back in the day, you won’t have enough to retire now because everything has gotten more expensive. That’s why pension funds usually invest part of their money into stock markets. Minor fluctuations over time (like a company losing a quarter of its value this year and making everything back next year) aren’t very important if you’re saving money for 30 years in the future.

There is a massive downside to stocks, though: they’re a quick way to lose money, and way too many people get sucked into complex financial contracts they have no understanding of. Take the Robinhood traders that didn’t realise they were signing contracts that could make them owe tens or hundreds times the amount of money they put in. You could also make a mistake and loan a lot of money to a company in exchange for stocks and end up with nothing when the company goes bankrupt. You could also sell too early and lose all of your profits to the minor fees stock brokers demand to do the actual stock trading for you, as everything needs to be registered properly.

Another problem with the stock market is that large funds, such as hedge funds and pension funds, need people to run them. There’s an incentive for those funds to make as much of a return as possible, regardless of what happens to the companies they buy parts of. When these funds come into control of a company, making decisions that only make a profit in the short term and screw over everyone in the long term can make those funds a lot of money, at the cost of the businesses they buy. Businesses can protect themselves from this (by not selling more than 49% of their stock, for instance, or by having 51% or stocks in the hands of their CEO/leadership, so any decision can be overruled). However, companies often like the idea of making money more, plus the more control they give to stock holders, the more their stock will be worth.

This stuff is also why there are rules about all of this. Look at the lives ruined by cryptocurrencies to see what happens when you don’t have them. In the end it’s just people making mistakes and ruining their own lives, but as a society we’re better off protecting each other from making those mistakes.

When it comes to anticipating rise in/fall of value, you don’t need stocks. There was a massive prospective market on pogs and beanie babies. People still buy action figures, Pokémon cards, and action figures to hopefully make a profit one day.

I like the way you framed the request. Too bad the answers are either waaaaaay too long wall of texts, uninformative zingers or bitter jokes.

Here’s my attempt.

1. A tool that allows a detached involvement with capitalistic production fueled by the individualistic drive for more wealth.

2. A way for entrepreneurs to chase the mith of permanent growth beyond the limitations of fisical assets.

3. A dangerous all compassing framework for our values that has no positive connection with the material condition of humankind.

To me the stock market was started as a way for individual business owners to raise capital to make a large purchase (open a factory, etc.). Then it became a novel way to speculate on the FUTURE performance of some business. It’s become a way to make money by playing on the emotions of other investors.

Systemic gambling with a house that cheats constantly.

A stock is a piece of the deed or title or charter or whatever that is the essence of the company as a piece of property.

You can buy that piece of the property for a value which fluctuates based on the value of the company as a whole, your fractional piece is tied to the value of what it’s a piece of.

The stock market is the cumulative eco-system in which people are buying and selling stocks in different companies based on fluctuations in value of different companies at different times.

The name of the game is to basically always be selling just before a downturn and always be buying just before an upswing, so that the money you’ve bought the stocks with is always growing, because your bought stocks are always growing in value, until you decide to sell them.

There is a lot of other factors to it but that’s basically it. It’s a system in which you temporarily buy small pieces of companies for the purpose of selling them once they’re more valuable than they were when you bought them.

If you’re thinking that sounds a lot like crypto, you’re not wrong, but the difference is that stocks actually have a modicum of regulation that are meant to keep people from getting fucked over quite as hard as crypto has done. Doesn’t mean that premise is always lived up to, just look at 2008, but overall the stock market represents the safest form of investment you can make other than stuff like federal investments or buying a home that you intend to pass along to your kids.

I’ll take a shot from the hip at this question, but note that I won’t add my customary citations or links.

The stock market is the paragon of property and trusts, contracts, corporations and law, and the capitalist socio-economic system. The very existence of the stock market implies a society that has some or most of these concepts.

For example, for shares to be traded, there generally must exist ownership rights upon the shares, distinct from the ownership rights that the company has of its own property. Or if not outright ownership of a share, then the benefit that a share provides (eg dividends). It also implies a legal system that will enforce these rights and the obligations of the company to its shareholders.

For a tradable company to exist, it must be organized/chartered as an entity distinct from any single person. This is different than the feudal days, when ventures would be undertaken “in right of the King” or some member of the nobility. It has to be this way, or else the King/Duke/Count/whatever could stiff the shareholders by just taking all the earnings. The company still needs to be created by legal means, either an Act of Parliament/Congress, by letter patent from the Monarch, or the modern administrative method of applying to the state Secretary of State (USA) or Companies House (UK) as examples.

Even the structure of a for-profit tradeable company – when to a state-owned enterprise, a non-profit, a co-op, an NGO or QUANGO – is a representation of the values inherent to capitalism. A company is obliged to use the shareholders’ funds – which is held by the company but is owed to the shareholders – to extract the greatest return. But this can come in many forms.

Short-term value from buying investments and quickly flipping them (eg corporate home buyers) is different than rent-seeking (eg corporate landlords) and is still different than long-term investments that actively work to build up the value (eg startup incubators, private wealth funds, Islamic banking, transit-owned adjacent property). If a for-profit company doesn’t have a plan to extract a return… they’re in hot water with the shareholders, with penalties like personal liability for malfeasance.

Another way of looking at the stock market is that if you have all the underlying components but don’t yet have a stock market, it would soon appear naturally. That is to say, if the public stock markets were banned overnight, shares would still trade but just under the table and without regulation. But if any critical part underpinning the markets stopped existing, then the market itself would collapse.

History shows numerous examples where breakdowns of the legal system resulted in market mayhem, or when corporate property is expropriated for the Monarch’s wars or personal use, or when funds invested into or paid out of companies is hampered by terrible monetary inflation.

As for what the stock market does, its greatest purpose is to organize investments into ventures. Historically, ventures were things like building a ship to sail to the New World and steal obtain goods to sell at home. Merchant ships were and are still very expensive, so few singular persons could afford it. And even if the could, the failure of the venture could be catastrophic for that person’s finances. Better to spread the risk and the reward amongst lots of people.

What was once the sole domain of the landed gentry and nobility, slowly opened to the nouveau riche during the Industrial Revolution(s), then in turn to everyday people… for better or worse. It’s now almost trivial to buy a share in any particular listed company, but just opening the stock market to everyone would have been chaotic at best. I think it’s NYSE that still has on-floor traders/brokers, but imagine if all shares in that market had to be traded in a single room. It’s already quite lively, now add all the online trades from middle class Americans on payday. It would be impossible.

Likewise, a pure capitalist stock market would permit awful things like bribing journalists to write fake stories to crash a stock, then buy it for cheap. Or pump and dump scams. And would have no “circuit breakers” that halt during so-called flash crashes.

I’m reminded of a scene from the ITV show Agatha Christie’s Poirot in the episode “Appointment With Death”, where a wealthy woman is not only murdered but her business empire collapses because the markets panicked and sold up. The relevant implications here is that despite her company not having changed its financial picture, it got cut up for scrap and thus lost most of its value, rendering the business worthless in the end.

Suffice it to say, the stock market is a lot of things. But I view it as a natural result of certain other prerequisites, meaning we can’t really get rid of it, so instead it should be appropriately regulated.

“Rich people’s yacht money.”

Just replace 99,9% of instances containing “the economy” and substitute. Makes a lot of things click.

A graph of rich people’s feelings

It’s a part of ownership of the means of production. Rich people buy a stake of the means of production there.

Buying there can take the form of gambling or more careful storage of money depending how it’s done. It’s a superficial structure that naturally evolves from capitalism.

People want to buy and sell portions of companies. Stock markets let them do that. Things like fractional shares and ETFs allow individual investors to invest more easily which is great, but it would be naive to think the big firms don’t have more of an advantage. People yap about the efficient market hypothesis a lot while forgetting that it’s a hypothesis. If someone can get an advantage they’ll do it. It’s still wide advice for newbies who think they r cracked the code lol but for reals big players can and do find opportunities to make money that other people don’t know about.

Gambling for absurdly rich where our lives are used as casino chips.

It’s a game you play with people who has access to cheats, but your role in the game is so limited that just by playing it safe you also can win a little.

Literally a pyramid scheme. Companies print their own money with extra steps, then compete with each other for your attention about it. Nothing creates value quite like conjuring it freely from the imagination. You can’t make money any faster, so you just give yours to the best money printers.

Hot potato.

Stocks are fancy notes that the owning class convinced pensioners are better than an actual pension. This amounted to a lot of elderly people not having adequate retirements. Its also a convenient method to exploit your labor by participating in stock buybacks, which inflate the wealth of the owning class, by not reinvesting money in your company’s work force. Its a triple pronged trident to fuck the poor and allow the rich to all become avatars of Mammon.