The Long-Term Stock Exchange Opens for Business
blog.ltse.com
The Long-Term Stock Exchange Opens for Business
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Re: The Long-Term Stock Exchange Opens for Business
#2Is Warren Buffet involved, I wonder? I’m reading “The Intelligent Investor” at the moment, and it seems to me the principles of defensive investing would align closely with this new exchange.
Re: The Long-Term Stock Exchange Opens for Business
#3"They described the immense pressure on companies to pursue short-term results over creating value for future decades and generations."
Where does this pressure come from? The board? Can't you appoint a board that is long-term friendly? Institutional investors? Wouldn't the same investors interested in the LTSE also be interested in you on the traditional market if long-term is part of your DNA? Shareholders? Shareholders agree to all sorts of craziness if they like your company (see voting structure of Palantir, Facebook, etc.)
Maybe others can elaborate on what problem is being solved here.
Re: The Long-Term Stock Exchange Opens for Business
#4I read this article and skimmed the original and I'm still not sure what the exact details of this exchange are. No robo/quant investing? Minimum hold periods? No requirements for quarterly earnings? No penny stocks?
Re: The Long-Term Stock Exchange Opens for Business
#5So how do we monetize this? I see the idea is the long term goal of sustainability, but how does one get their money out at the end? I wouldn't have these expectations for most of these initiatives, except for the use of "stock exchange", so I expect there to be some reason to exchange stock. Call it "the green list" or something if there's no money to be had, and that's totally fine, but the name doesn't match the goal.
Re: The Long-Term Stock Exchange Opens for Business
#6"They described the immense pressure on companies to pursue short-term results over creating value for future decades and generations." Where does this pressure come from? The board? Can't you appoint a board that is long-term friendly? Institutional investors? Wouldn't the same investors interested in the LTSE also be interested in you on the traditional market if long-term is part of your DNA? Shareholders? Shareho…
I have no idea if this solves the problem, but I think the problem is shareholders. Specifically, a proportion of shareholders favour short-term profits, and those shareholders outcompete the long-term minded shareholders leading them to have greater influence over time. These short-term shareholders are extracting value at the expense of wider society, and it's a massive problem.
Re: The Long-Term Stock Exchange Opens for Business
#7Buffett, Bogel, and other famous financial folks signed a doc to overcome short-termism in 2009 that goes into more technical details: https://assets.aspeninstitute.org/content/uploads/files/cont...
Modern executives have incredible pressure to hit quarterly numbers and the ones that provide value in the long term are the ones that can effectively ignore this pressure.
Short term pressure also forces firms to play accounting games like taking big goodwill impairment losses in a down quarter, so they don't need to perform a writeoff in subsequent quarters.
Re: The Long-Term Stock Exchange Opens for Business
#8"They described the immense pressure on companies to pursue short-term results over creating value for future decades and generations." Where does this pressure come from? The board? Can't you appoint a board that is long-term friendly? Institutional investors? Wouldn't the same investors interested in the LTSE also be interested in you on the traditional market if long-term is part of your DNA? Shareholders? Shareho…
One of the problems with the regular stock market is that valuations are not tied to the future cashflow of the company.
This isn’t how the LTSE works but it would be awesome if there was an exchange that required every company to pay a fixed percentage of their cash flows every year after X years. Combined this with a minimum holding period, and I dare people to bid $300+ for Tesla stock :)
Re: The Long-Term Stock Exchange Opens for Business
#9"They described the immense pressure on companies to pursue short-term results over creating value for future decades and generations." Where does this pressure come from? The board? Can't you appoint a board that is long-term friendly? Institutional investors? Wouldn't the same investors interested in the LTSE also be interested in you on the traditional market if long-term is part of your DNA? Shareholders? Shareho…
Yes, I feel like more of an explanation is required. Investors in existing exchanges already understand the different metrics companies might be categorized under -- value vs growth, for example -- and this seems like "extra-long-term value." But does that require a new exchange, or just a new valuation for companies? How about an index fund that invests only in such companies?
I would probably invest in a "Vanguard Long-Term Growth Fund," and I would assume that companies that got themselves on such a fund would want to stay there.
Perhaps the LTSE includes new rules for things such as how often stocks can be traded, but this isn't evident from that blog post, or the first one referenced in the post.
Re: The Long-Term Stock Exchange Opens for Business
#10Great, a new service that lets any present issues with a company be excused in favor of some forever-distant "long term". And why is it even an unalloyed good that a company persist over a "long term"? If someone else can do better today, I want to move investment to them today.