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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

#501

Post by joshu »

laughinghan wrote: post #489
joshu wrote: post #481

Earlier quoted context omitted.

continuous trading isn't really necessary... could do a once a week or once a day crossing. i feel like "more votes the longer you hold the stock" is also a mistake - it should be, your votes are higher weighted if you agree to a longer lockup. 10 year lockup, lots of votes. no lockup, very little...

That's an interesting idea, but in practice surely shareholder voting power has negligible influence on company management compared to share price incentives?

Maybe? But that's the whole LTSE schtick, right?

Re: The Long-Term Stock Exchange Opens for Business

#502

Post by read_if_gay_ »

valuearb wrote: post #472
lappa wrote: post #465

Earlier quoted context omitted.

IMO, the main difference between LTSE and a traditional stock exchange is the way votes are allocated to shareholders. Traditionally voting power is proportional to shares owned. However, on LTSE the amount of time a stock has been held is also considered. There is no minimum holding period, but there is an incentive to hold. A bit of a tangent: Since there is a premium in voting rights (GOOG vs GOOGL), I'm curious t…

This seems problematic. The longer you hold your stock the more voting rights and hence value it accrues. But if you sell the shares all the accrued value is lost. So it surely leads to proxy voting, where former owners still are registered as owners of their former shares, but vote them for whoever they secretly sold the shares to.

I might be naive, but are you not going to get caught doing this? Because if you're secretly selling enough shares that your voting rights will have an actual impact, it seems like that'll be a fair amount of money you'd also need to transfer secretly, which is not that easy.

Re: The Long-Term Stock Exchange Opens for Business

#503

Post by imagin8or »

cmroanirgo wrote: post #478
bricemo wrote: post #452

Let me try to summarize everyone’s same question: - The idea of a stock exchange that allows companies and investors to focus on 5, 10, 25 year horizons sounds great! - However companies on normal stock exchanges now already try to do this, but it’s hard because of quarterly earnings, pressure for quarterly growth, etc - How is LTSE different? Seems like: Companies and investors “promise” to have a longer term focus…

I used to be part of the system that built machines that auto traded on arbitrage opportunities due to millsec/nanosec differences in reported prices in different exchanges. Although probably not popular I would suggest that long term stocks needs to incorporate features that actively block certain trading patterns: limit price changes, limit buy/ sell frequency, & disallow shorting. I have been heavily involved in t…

Regarding limited trading: anyone but a retail trader could trade the forward OTC rather than this illiquid thing on the exchange. We can trade our guesses for tomorrow's price (which is really the live current price) as much as we want, and it will just wash out tomorrow.

Regarding length of ownership: so I make a fund which owns an LTSE-listed stock for a longer term, and people trade my fund instead.

Ultimately, neither of those things is much use, nor even necessary. A much stronger driver for long-termism would be to derive the dividend from the last 3 years of profits; since prices are estimates of future value and future dividend, the actual value of those would be smoothed; if any action can only make a small difference to the dividend, there is much less focus on quarterly results.

A formula or at least limits on dividends (no windfalls) would reduce the interest to activist investors who might see a pot of cash and seek to liberate it.

Re: The Long-Term Stock Exchange Opens for Business

#504

Post by tome »

samatman wrote: post #392
centimeter wrote: post #238

Earlier quoted context omitted.

> I hope others see that our markets are designed. They are human artifacts. They are not natural laws to be accepted as-is. “Markets” are not the same thing as “the market”. Markets are human artifacts; the market is an emergent behavior. It’s governed by laws beyond our control as surely as the behavior of materials are governed by thermodynamics. If the behavior of your markets fails to match the reality of the ma…

The way you've put this bears more resemblance to religion than anything else. "Markets" are real things. I can walk to them, or navigate to their website, or call them up. You are claiming that there is an invisible, metaphysical "the market", which exists in the Platonic world of forms, that governs the behavior of these genuine markets. This is like reading "The Gods of the Copybook Headings", and founding a relig…

On the contrary, he/she is claiming that "the market" is an emergent behaviour of the dynamics of a system. We set up "market" and instigate rules. "The market" is what happens subsequently.

Re: The Long-Term Stock Exchange Opens for Business

#505

Post by pirocks »

WalterBright wrote: post #493

This short-term-pervades-the-market is based on the idea that the current stockholders are able to trick future stockholders into buying stocks that have eaten their seed corn, before those future stockholders realize this. How can this process of continually tricking the next investor possibly work out quarter after quarter? Wouldn't the stock market have tanked long ago if this was, in fact, underlying the bulk of…

>How can this process of continually tricking the next investor possibly work out quarter after quarter?

I imagine that if the next investor was someone like a retirement fund this could work out pretty well, since they have a steady flow of money being paid in. I don't know to what extent that actually happens.

Re: The Long-Term Stock Exchange Opens for Business

#506

Post by giantg2 »

giantg2 wrote: post #444
kirubakaran wrote: post #439

Earlier quoted context omitted.

Just don't get divorced. The "shovel guy": https://en.wikipedia.org/wiki/Samuel_Brannan > Brannan's wife divorced him and he was forced to liquidate much of his real estate to pay her one-half of their assets. He died poor and in relative obscurity

Better still - don't get married. It's just a piece of paper that says somebody else can take half your stuff.

Why downvote if you won't correct me?

Re: The Long-Term Stock Exchange Opens for Business

#507

Post by fluffything »

michaelt wrote: post #496
fluffything wrote: post #492

Earlier quoted context omitted.

> & disallow shorting. Why would you completely disallow shorting ? I'd think that in such a framework, shorting would just need to become a longer term bet. So one could offer something like 2,5,10 year LEAPs, but restrict their trading to a window of 1 week per year (e.g. one can trade derivatives as much as one wants, but only during week X, which is the week when all derivatives expire, and all derivatives are lo…

If traders have to be covered with the actual stock, would that mean they can only short Foo shares up to the amount they own? Surely that's equivalent to just selling your holdings? Or are there people who'll loan out their stocks for 10 years, trusting the borrower has enough cash not to go bankrupt in 10 years no matter what happens?

> If traders have to be covered with the actual stock, would that mean they can only short Foo shares up to the amount they own? Surely that's equivalent to just selling your holdings?

I had selling a call option in mind.

Re: The Long-Term Stock Exchange Opens for Business

#508

Post by WalterBright »

pirocks wrote: post #505
WalterBright wrote: post #493

This short-term-pervades-the-market is based on the idea that the current stockholders are able to trick future stockholders into buying stocks that have eaten their seed corn, before those future stockholders realize this. How can this process of continually tricking the next investor possibly work out quarter after quarter? Wouldn't the stock market have tanked long ago if this was, in fact, underlying the bulk of…

>How can this process of continually tricking the next investor possibly work out quarter after quarter? I imagine that if the next investor was someone like a retirement fund this could work out pretty well, since they have a steady flow of money being paid in. I don't know to what extent that actually happens.

Retirement funds lose their investors if they do poorly.

Re: The Long-Term Stock Exchange Opens for Business

#509

Post by r3un1 »

unityByFreedom wrote: post #464
AmericanChopper wrote: post #456

Earlier quoted context omitted.

> The idea of a stock exchange that allows companies and investors to focus on 5, 10, 25 year horizons sounds great! But this already exists. It's just the regular stock exchange. It's also worth noting that a majority of the capital in the market is already focused on very long term horizons. Most of it is sitting in boring mutual funds, who's investors are looking towards retirement as their horizon. If you're look…

If you want long term focus, invest in an index. No single company can weather every storm. Sometimes they need short term focus to survive in the long term.

I think the idea is that a lot of the perceived instability in the economy is _caused_ or at least much amplified by the nature of stock markets. Changing how one thinks about stocks and what the ideal of a "healthy" company looks like might alleviate some of these problems.
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