In a fiery blog post from 2006, billionaire investor Mark Cuban pulled no punches in criticizing the stock market.
He titled the post, “The Stock Market is for Suckers,” and spent over 2,000 words explaining why everyday investors are often set up to lose.
His core argument? Wall Street is designed to benefit itself, not the people putting money into it.
“Buy And Hold” Is Marketing, Not A Strategy
Cuban took direct aim at the popular investing philosophy of buying stocks and holding them long-term.
He called it the “second most misleading marketing slogan ever,” comparing it to “rinse and repeat” on shampoo bottles.
According to Cuban, the idea that people can just sit on their investments for decades is unrealistic.
“You can have as long a term horizon as you want,” he wrote, “but like most other long-term plans we have, most people’s lives don’t match up to their ‘horizons.'”
Life happens, and people often need to cash out at the worst possible time, like when the market is down, locking in losses they may never recover from.
Funds And Indexes Put The Individual Last
Cuban said the average investor is up against an entire ecosystem designed to make money off them.
Mutual fund managers, index creators, and financial advisors all get paid no matter how the investor does.
“Everyone is getting paid on the gravy train, except for the guy putting in the money at the end,” he wrote.
He questioned the integrity of widely trusted tools like the S&P 500 and Dow Jones, saying they are constantly rebalanced to serve the marketing interests of companies that run them.
“You are not buying a passive investment that tracks the economy,” he said. “You are buying the stock pickers at those respective indexes.”
Even ETFs, which are often pitched as a low-cost way to invest broadly, weren’t spared.
Cuban emphasized that most people have no idea what they’re really buying and are lulled by clever marketing.
Trading Takes A Knowledge Edge
Cuban admitted that he trades stocks himself, but only when he has an edge. He said the only way to succeed consistently in trading is to “always have a definite knowledge advantage about the company you are trading.”
“Every stock transaction has a sucker, and you have to know whether it’s you or the person on the other side of the trade,” he warned.
If you’re not putting in full-time effort to learn the ins and outs of a company, he argued, someone else is, and they’ll win.
He Sees The Market As A Ponzi Scheme
At one point, Cuban compared the entire market structure to a Ponzi scheme.
“As long as money keeps on coming in, then there is someone to take the stocks from the sellers,” he wrote.
But if inflows slow, prices can collapse quickly, as they did when the Nasdaq fell from 5,000 to under 2,000 during the dot-com crash.
Without consistent new money entering the market, Cuban argued, the entire system falls apart.
He even called out the constant barrage of commercials from brokerages as a way to keep retail investors pouring money in.
Why He Still Invests—But Differently
Cuban isn’t against all investing. He said he buys stock in companies that align with his other businesses and give him access to decision-makers.
“When I pick up the phone and call the CEO of a company I own shares in, they call me back very quickly,” he wrote.
That access allows him to create opportunities that regular investors simply can’t replicate.
Cuban argued that unless you have control, influence, or inside access, you’re not really investing, you’re just gambling.
He closed the blog by suggesting that people put their time and money into things they can control, like building skills or spending time with family.
“That’s an investment you never have to pay a commission on. You never get a margin call. And the returns can be astronomical.”
For Cuban, the real payoff isn’t chasing the next hot stock; it’s building something that can’t be taken away in a crash.
IMAGE CREDIT: “Mark Cuban” by Gage Skidmore, via Flickr. Licensed under CC BY-SA 2.0. Image adjusted for layout.