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The Long-Term Stock Exchange Opens for Business

blog.ltse.com

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Re: The Long-Term Stock Exchange Opens for Business

#121

Post by eries »

rglover wrote: post #114
eries wrote: post #102

Earlier quoted context omitted.

We require companies that list with us to adopt corporate governance that aligns their behavior and incentives to the long term. I know that doesn’t sound super sexy but we believe this is a high-leverage point for reforms We will have more to say on reforms that relate to reading in the future, but we don’t limit the ability of “tourists” to trade in and out of stocks as normal.

Will those corporate governance guidelines be publicly available? Are shareholders able to influence these guidelines at all?

Yes all of our listing standards are publicly available both on our website and in numerous legal filing

Yes, we believe in the role of long-term shareholders in corporate governance

Re: The Long-Term Stock Exchange Opens for Business

#122

Post by eries »

jbob2000 wrote: post #115
eries wrote: post #102

Earlier quoted context omitted.

We require companies that list with us to adopt corporate governance that aligns their behavior and incentives to the long term. I know that doesn’t sound super sexy but we believe this is a high-leverage point for reforms We will have more to say on reforms that relate to reading in the future, but we don’t limit the ability of “tourists” to trade in and out of stocks as normal.

What do you define as long term? At some point, the best answer for longevity is for a company not to exist at all, given that the purpose of most companies is extraction , or some sort.

We will endeavor not to list such companies

Re: The Long-Term Stock Exchange Opens for Business

#124

Post by cactus2093 »

superqd wrote: post #79

Hmmm, a bit disappointed after reading their blog and site. I expected that they'd integrated some clever rules around stock trading itself in order to force, or encourage, long term thinking. I expected something along the lines of, "no shorting allowed", "stocks must be held a minimum of 6 months", etc. There was nothing like that, all they have is the rule, "come on guys, think long term". I fail to see how this w…

Why is shorting not consistent with long-term thinking? You can think a company or industry will decline over a long-term horizon, just as much as you can think it will grow. It seems like the symmetry of being able to be either short or long on a company is a useful part of the market signal.

I'm also not sure "hold for 6 months" is particularly useful. A lot of people are already investing on that timeline today and it hasn't solved the problem. Also, there are enough investors on aggregate that there would still be a lot of buy/sell activity every day even with that model.

Something that might be kind of interesting is if there were a short trading window every ~5 years or something. Then nobody is trading at all for years, the company can focus completely on the long-term vision and only have to check in and worry about the public perception of the work for a short period of time every few years.

Re: The Long-Term Stock Exchange Opens for Business

#125

Post by xorcist »

Want to invest in stocks long term? Buy some stock in an unlisted company. Then you are stuck with them whether you like it or not.

Above only partly in jest. Modern crowdfunding-style stock platforms offers this to anybody, and while most startups fail, there are exceptions. The long term commitment required is a different experience.

Re: The Long-Term Stock Exchange Opens for Business

#126

Post by eries »

maximilianroos wrote: post #117

I can understand the effort to weigh firm's incentives towards longer-term incentives, and I can see how the suggested changes to companies' structure would achieve that. But why do those changes need to be coupled to the exchange a company assigns as its primary listing venue?

Companies can dual-list so LTSE does not need to be the primary venue

Stock exchanges have the obligation to set standards for the behavior of managers and investors. It’s this dual-stakeholder role that uniquely allows our reforms to take hold.

Believe me, I looked long and hard for an easier way to get this done

Re: The Long-Term Stock Exchange Opens for Business

#127

Post by eru »

mcny wrote: post #105
crazygringo wrote: post #91

With all respect to Eric, I strongly believe the concept of forcing "long-term investment" is ultimately a scam. At the end of the day, it's fundamentally a blank check for management to misbehave -- to misspend money, pursue pet projects rather than real business goals, and have nobody to tell them no. There is nothing inherently short-term about the stock market -- this is a myth that keeps getting repeated but has…

> But if you prevent people from selling, then you're preventing the market from holding a company accountable when its management messes up. Is it even possible to hold management accountable for anything at all? Personally, I think executive compensation is the real culprit. I've tried to think of ways to put a cap on compensation but I can't think of any way especially since the management of one company is on the…

Why would you want to put a cap on management compensation?

The comp for the highest level of management essentially comes out of the same pool of money as the returns to shareholders. If shareholders want to pay the CEO lots of money, let them. It's their money.

Especially, C-level executive's pay doesn't really come out of the same pot of money as low level employees' pay. The pay for cashiers at Walmart is more dependent on what Target or McDonald's pay their cashiers than on how much money the CEOs make.

Thanks to outsourcing jobs to third parties capping exec pay at some multiple of lowest employee pay doesn't make much sense. Many companies don't directly employ their security guards for example, but pay a third party company.

As for board members: they should be compensated however much they can negotiate for.

If I were to own a company, I would have opinions on how much the board members should be compensated. But who am I to tell other people how much to pay for services?

And I don't think all board members necessarily own significant amount of shares. See also https://en.wikipedia.org/wiki/Independent_director

In any case, I don't really understand how capping compensation would help hold management to account? I can see an argument for how management should mostly be paid in eg stock, so that their incentives are aligned properly. But I don't think that's what you wanted to get at?

Re: The Long-Term Stock Exchange Opens for Business

#129

Post by mikepurvis »

throwaway0a5e wrote: post #94
mikepurvis wrote: post #63

Earlier quoted context omitted.

Not the parent, but it's obvious what the origin of the phrase is, and while it may not be as icky as something like "open the kimono", it's definitely one that is trivially replaced with no loss in meaning, and therefore almost certainly should be: "The issue with 'off the reservation' and similar phrases is that these things are said without any thought. They become a part of the common vernacular. Freely they move…

>"The issue with 'off the reservation' and similar phrases is that these things are said without any thought If they are said without any thought or connotation then is there really any slight against whatever group is the origin of the phrase? He could have just has easily said "off in left field" which is arguably a slight against leftists and commies but has so long been a colloquialism that it has lost that conno…

The name of the Washington football team was also used "without any thought", and that there was no need to change it as it wasn't meant as a slight against the group for whom the name is a slur. But it turns out that these things can be hurtful even if you don't mean them in a nasty way.

But yeah, "off in left field" is a baseball thing; no one is harmed or offended by that— even if you do apply it to politics or use it in a political context, as the WP article briefly mentions, politics are something you choose, not your cultural identity, so it really isn't the same thing at all: https://en.wikipedia.org/wiki/Out_of_left_field

Another interesting case is the phrase "balls to the wall" which has a harmless origin with aeronautics, but is spicy enough on account of an obvious alternative interpretation that it isn't used in polite company.

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