Stock-market investors are no longer investing for the long term, Pitt says Ex-chairman of the Securities and Exchange Commission Harvey Pitt had an withering take on the current state of the stock market, which has seen average speculators crushed by short-volatility products and speculators gripped by a fervor around blockchain-related assets. Pitt told CNBC during a Friday morning interview that the U.S. has "become a nation of day traders." The Brooklyn -born, 72-year old legal professional was the 26th SEC head from 2001-2003 during George W. Bush's first term. Read: How Wall Street's 'fear gauge' is being rigged, according to one whistleblower (http://www.marketwatch.com/story/how-wall-streets-fear-gauge-is-being-rigged-according-to-one-whistleblower-2018-02-13) His comments come after a historic surge of one key gauge of Wall Street fear, the Cboe Volatility Index, helped lead to a 10% tumble on Feb. 5 from a recent peak for the Dow Jones Industrial Average, S&P 500 index and Nasdaq Composite . Stocks have since recovered some of those losses (http://www.marketwatch.com/story/dow-ready-to-hold-above-25000-as-us-stocks-line-up-best-week-more-than-a-year-2018-02-16)but not before the abrupt downturn after a period of calm and relentless records for the main equity benchmarks revealed a trove of bets by unsophisticated investors that measures of market serenity would persist. Investors also have rushed into cryptocurrencies, as so-called FOMO, or fear of missing out, helped to drive prices of bitcoin to a record around $20,000 before tumbling to half that level presently. Against that backdrop Pitt offers some sage advice about investing in companies: "First figure out what the company does, figure out why you want to make an investment, do diligence in terms of finding out whether it's a real company or just a name. And if you satisfy yourself on all of those elements, then invest. The problem we have is that most people investing in these companies are doing it because they want to partake of a craze and they don't have any idea why they're making their investments or what the companies do," he said.
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