Shouldn’t this be an index fund with conditions to be included rather than a stock exchange ?
The Long-Term Stock Exchange Opens for Business
141–150 of 561 posts
Re: The Long-Term Stock Exchange Opens for Business
#142Just throwing this out there... Why not a simple rule to require all shares to be held for at least 24 hours before selling? It would certainly change the game in every way imaginable.
It would but powerful vested interests would probably fight it tooth and nail. See https://en.wikipedia.org/wiki/Tobin_tax
Not just powerful vested interests. Anyone who knows anything about economics knows that transaction taxes are bad for efficiency etc.
Tax wealth for all I care. But don't tax transactions.
(Btw taxing transactions would actually make financial speculation more profitable. Because bid/ask spreads would become wider and prices more volatile.)
Re: The Long-Term Stock Exchange Opens for Business
#143Amazing to see you here Eric. Having worked in Equities most my life I love the idea you are putting forward here. We really need to stopthinking in terms of "next quarter" and structure our markets for the longer term. Question for you : What are your thoughts on corporate buybacks on your exchange?
I think buybacks have occasional legitimate uses, but there’s a reason that they were considered basically illegal not that long ago
I think if companies are sincere in their desire to use buybacks only for good purposes, they should commit to report “EPS net of buybacks”
Re: The Long-Term Stock Exchange Opens for Business
#144The assumed problem is that investors of publicly traded companies pressure management to make suboptimal decisions, because they overfocus on short-term performance instead of maximizing the present value of all future cash-flows.
Looking at TSLA, AMZN, FB... I'm skeptical about this premise.
Re: The Long-Term Stock Exchange Opens for Business
#145Is there an index fund where I can easily buy into all the companies in the LTSE?
Re: The Long-Term Stock Exchange Opens for Business
#146Just throwing this out there... Why not a simple rule to require all shares to be held for at least 24 hours before selling? It would certainly change the game in every way imaginable.
What do you want to accomplish here?
Market makers are good for widows and orphans. You don't want your grandma to have to be careful with the day of the week or time of the day when she sells her stocks.
Re: The Long-Term Stock Exchange Opens for Business
#147I’m not sure how this works practically. Let’s say Apple wants to do this, and they list. Do they issue new shares of stock, and that dilutes their other shares? How is the price determined on this exchange? If there are no restrictions on trading, and Execs get stock on LTSE, Wouldnt market reactions to quarterly reports still move price around, incentivizing short term results?
Re: The Long-Term Stock Exchange Opens for Business
#148Can/will LTSE restrict options trading?
Re: The Long-Term Stock Exchange Opens for Business
#149Amazing to see you here Eric. Having worked in Equities most my life I love the idea you are putting forward here. We really need to stopthinking in terms of "next quarter" and structure our markets for the longer term. Question for you : What are your thoughts on corporate buybacks on your exchange?
I think buybacks have occasional legitimate uses, but there’s a reason that they were considered basically illegal not that long ago I think if companies are sincere in their desire to use buybacks only for good purposes, they should commit to report “EPS net of buybacks”
They do. The number of shares outstanding is publicly reported. You can already divide earnings any way you want yourself. To me shares buyback is just the counterpart to selling shares on the open market to raise capital. It’s anti-dilutive and can be in the interest of shareholders.
Re: The Long-Term Stock Exchange Opens for Business
#150The only way I think investors could invest more in companies with a long term view is better margining so you could borrow money to invest in companies without getting margin called. Eg you can buy a house with 5% down, but you can't do this with stocks because normal volatility means you'll likely be wiped out.
You can buy (and sell) options to limit the impact of that volatility.
But I'm not sure why you would want to encourage margining when you are against volatility? The capital for the margin loan has to come from somewhere too.
So instead of person A putting up 5$ and borrowing 95$ to own 100$ in stock, and person B lending those 95$; it might be better for volatility for person A to own 5$ in stock and B to own 95$ in stock?
I am not sure.
For full disclosure: my investment strategy involves margining.
(Btw, I do think that 5% equity on houses is bad. It's mostly a function of land prices going up so much.)