Speculating that prices are too high is as natural (and necessary) a part of any well functioning market as speculating that they are too low. For stocks downward speculation is called "short selling" and it has often been the boogeyman of regulators and politicians who want to score cheap political points based upon people's ignorance of how free markets work and which come at the expense of the market's function as a whole.
Consider: what would happen to stock prices if short selling were outlawed? With no countering force to long speculation, stock prices would on average be too high, and in specific cases (eg, the GME long side manipulation we saw a while back) certain stocks would become MASSIVELY overvalued.
Why is this a problem? Because one of the most important functions of any free market is to generate correct prices. Correct prices are perhaps the most important reason that free markets outperform centrally planned markets. It's not hard to see that correct pricing requires that speculators have the ability to express that prices are too high (by shorting) as surely as they can express that they are too low (by going long). Removing shorts distorts market pricing and degrades the ability of free markets to efficiently allocate capital.
Aside from market efficiency arguments, people often feel that banning short selling will somehow protect them because they reason their stocks will be 'less likely to go down' because the 'greedy speculators' out there 'manipulating markets' will be banished. Banning shorts will not prevent price manipulation; for example pump and dump scams like the GME fiasco will work just fine without shorts in the market (except that they become much worse). Reckless long speculators will continued to be fleeced, and investors will on average get significantly worse prices on their investments.
Are you perhaps conflating legitimate speculation with abusive forms of market manipulation like insider trading or cornering? If you're thinking of manipulation (which is often illegal) I can see your point.
Legitimate speculation, however, is very useful to efficient market function. For example, speculators provide liquidity, aid in price discovery, allow market participants to offload risk when there might not be a natural counter party, and more.
All speculation is bad. A transport company at least moves the good from one place to another. All a speculator does is move a good from one time to later time, reducing the ability for humanity to use things when they are more useful. A speculator adds no value, creates no inventions, consumes energy for no gain, and are the definition of useless eater. Kill them all.
Imagine playing a 4x game, and all your resources are controlled by speculators. You would fall so far behind as they hold on to a resource waiting for a better price.
Edit:
aid in price discovery
I need to add that the price of everything is infinite when speculators have their way. Just observe the Boomers throwing everything their parents built away just to live another few months.
I agree that there are some negative impacts of certain kinds of abusive speculation. However, I think that perhaps you may not appreciate quite how valuable the services speculators provide to markets are, primarily in regards to liquidity and price discovery. If you search the literature on this you can read plenty of research that concludes speculators are quite positive for markets, but let me try and provide a couple simple examples that I hope get the point across.
First: liquidity. Speculators provide a large chunk of the liquidity in any given market, and a more liquid market benefits all participants in several important ways. The speed, price, and depth (amount) of product you can transact all vary inversely to how liquid a given market is. If there are speculators in the market you will be able to buy more product at a better price more quickly than if they are not in that market. These are all tangible (and quite valuable) benefits that speculators are providing to you, the market participant. I can give you concrete example of why this is the case if you like.
Second: price discovery. Let's say you've done some research and have reason to believe that oil is likely to go up in price because some politicians are curtailing exploration and production due to some wild-eyed ideological reasons. As a result you take a speculative long position in a one year forward crude futures contract. If many speculators (or a few large speculators) have the same belief the price on that forward is going to rise. A rising price is a signal to other market participants to produce more, or that the policy is ill considered, etc. The value of that price signal is hard to overstate -- all of society benefits from it -- and it is only available because speculators are able to move price in response to their own projections on what ought to be the right price.
I could go on (and on) about this. Finance is my job and I participate in markets daily. The thought of outlawing speculation upsets me because I am 100% certain that it would lead to worse outcomes for market participants and for society at large. I hope you will reconsider your position.
Speculating that prices are too high is as natural (and necessary) a part of any well functioning market as speculating that they are too low. For stocks downward speculation is called "short selling" and it has often been the boogeyman of regulators and politicians who want to score cheap political points based upon people's ignorance of how free markets work and which come at the expense of the market's function as a whole.
Consider: what would happen to stock prices if short selling were outlawed? With no countering force to long speculation, stock prices would on average be too high, and in specific cases (eg, the GME long side manipulation we saw a while back) certain stocks would become MASSIVELY overvalued.
Why is this a problem? Because one of the most important functions of any free market is to generate correct prices. Correct prices are perhaps the most important reason that free markets outperform centrally planned markets. It's not hard to see that correct pricing requires that speculators have the ability to express that prices are too high (by shorting) as surely as they can express that they are too low (by going long). Removing shorts distorts market pricing and degrades the ability of free markets to efficiently allocate capital.
Aside from market efficiency arguments, people often feel that banning short selling will somehow protect them because they reason their stocks will be 'less likely to go down' because the 'greedy speculators' out there 'manipulating markets' will be banished. Banning shorts will not prevent price manipulation; for example pump and dump scams like the GME fiasco will work just fine without shorts in the market (except that they become much worse). Reckless long speculators will continued to be fleeced, and investors will on average get significantly worse prices on their investments.
Speculation is not part of a well functioning market.
Are you perhaps conflating legitimate speculation with abusive forms of market manipulation like insider trading or cornering? If you're thinking of manipulation (which is often illegal) I can see your point.
Legitimate speculation, however, is very useful to efficient market function. For example, speculators provide liquidity, aid in price discovery, allow market participants to offload risk when there might not be a natural counter party, and more.
All speculation is bad. A transport company at least moves the good from one place to another. All a speculator does is move a good from one time to later time, reducing the ability for humanity to use things when they are more useful. A speculator adds no value, creates no inventions, consumes energy for no gain, and are the definition of useless eater. Kill them all.
Imagine playing a 4x game, and all your resources are controlled by speculators. You would fall so far behind as they hold on to a resource waiting for a better price.
Edit:
I need to add that the price of everything is infinite when speculators have their way. Just observe the Boomers throwing everything their parents built away just to live another few months.
I agree that there are some negative impacts of certain kinds of abusive speculation. However, I think that perhaps you may not appreciate quite how valuable the services speculators provide to markets are, primarily in regards to liquidity and price discovery. If you search the literature on this you can read plenty of research that concludes speculators are quite positive for markets, but let me try and provide a couple simple examples that I hope get the point across.
First: liquidity. Speculators provide a large chunk of the liquidity in any given market, and a more liquid market benefits all participants in several important ways. The speed, price, and depth (amount) of product you can transact all vary inversely to how liquid a given market is. If there are speculators in the market you will be able to buy more product at a better price more quickly than if they are not in that market. These are all tangible (and quite valuable) benefits that speculators are providing to you, the market participant. I can give you concrete example of why this is the case if you like.
Second: price discovery. Let's say you've done some research and have reason to believe that oil is likely to go up in price because some politicians are curtailing exploration and production due to some wild-eyed ideological reasons. As a result you take a speculative long position in a one year forward crude futures contract. If many speculators (or a few large speculators) have the same belief the price on that forward is going to rise. A rising price is a signal to other market participants to produce more, or that the policy is ill considered, etc. The value of that price signal is hard to overstate -- all of society benefits from it -- and it is only available because speculators are able to move price in response to their own projections on what ought to be the right price.
I could go on (and on) about this. Finance is my job and I participate in markets daily. The thought of outlawing speculation upsets me because I am 100% certain that it would lead to worse outcomes for market participants and for society at large. I hope you will reconsider your position.