Otherwise, if a rich person invested in a well-known market, there are already seasoned negotiators established who know how to play hardball with the rich person and drive up the cost of investment. You see that being talked about in one of Steve Jobs old videos after he left Apple and moved on to Next. He said that the manufacturers were raising the prices on him because they know he had deep pockets.
This is why bubbles occur in the places that we least expect. The rich spend all day searching for loophole that they can take advantage of and then when it looks like they have as much as they care to invest in it, they pass down the information to their buddies and anyone else after that who overhears.
Many regulations were written to prevent the rich from easily transfering their money from sector to another without problems to develop. If you read about Cornelius Vanderbilt in the 1860s and 1870s, he would pull the stock market up, down and sideways with his moves. He greatly impacted the stock market to suit his own investments. There weren’t many regulations back then to stop his activities right away. He was the first tycoon and showed us how much impact a rich person can make on the market.
Even with old regulations covering certain systems of trading, that doesn’t stop the rich from taking advantage of different or new opportunities. Sometimes, they can practically invent their own system of trading and effectively throw off the balance of the markets.
The derivatives that started in the 1980s were said to cause a wider gap between the rich and poor. But I think the regulations in the stock market most likely led to more people adopting derivatives, which was a new thing at the time. It worked back then for the people, but the exchange of money has since changed and there have been plenty of other invented means to manipulate the exchange of money through gambling and guile.
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