Time magazine just caught up with what I have been saying for years. The article is on page 26 of the April 6 issue.

My claim for years has been that the stock market is a poor gauge of either the economy or the value of any particular company. Once the company has spent the proceeds from the IPO, the stock has little relation to the company, except for the CEO’s stock options.

The stock market is a big lottery where a quick buck, nerves, fear and emotions are more motivative than reality. And stockholders are often more interested in the quarterly profit and loss statement than the long range development of the company. The article notes that moneychangers often get rich by stimulating the boom and bust cycles we have seen in housing, electronics, commodities, savings banks and the like, merely for their own profit, while providing no appreciable added value to our productivity or future.

The final paragraph also includes a suggestion, close to what I suggested years ago: We should tax dividends or sale price gains on stock as ordinary income, with only one exemption — the rise in the official cost-of-living for each complete calendar year the stock was held. Any capital gains on stocks held less than a full calendar year would be taxed as straight income.

Harvey Versteeg

Augusta and Belleview, Fla.