Trading is the rearrangement of who owns what shares. The rearrangement entails paying commissions to brokers, fees to investment managers and cash to financial planners and business consultants who sell even more advice during this process. Of late, these frictional costs have escalated into whole industries that describe themselves variously as hedge funds and private equity firms. Buffett estimates that total costs may consume some 20% of the country's total annual corporate earnings.
