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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

#11

Post by Maximus9000 »

sfard wrote: post #4

I 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?

Me too. According to the wiki page:

> Operating principles: In an earlier SEC filing, LTSE said that its corporate governance rules might include: increased voting rights for shareholders who hold company stock for long periods of time, restrictions on offering short-term incentives to executives, disclosure of impact of any stock buybacks, and requiring companies to have a board-level long-term product and strategy committee.

https://en.wikipedia.org/wiki/Long-Term_Stock_Exchange

Re: The Long-Term Stock Exchange Opens for Business

#12

Post by imagin8or »

sfard wrote: post #4

I 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?

Agreed. I suspect that it's more like "The Stock Exchange For LongTerm(TM) Certified Companies", so more like the requirement that exchange-listed companies are at least 70% public.

Presumably that could mean requirements on board memberships, dividend levels, types of employment perhaps? I find it a bit hard to see what stipulations they would have that aren't just good governance.

Re: The Long-Term Stock Exchange Opens for Business

#13

Post by claydavisss »

sfard wrote: post #4

I 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?

Eventually, the only policy with teeth will be a minimum investing period. So don't worry about reading news of waste or fraud at a company, you can't sell anyway.

Re: The Long-Term Stock Exchange Opens for Business

#14

Post by pavlov »

AznHisoka wrote: post #8
picodguyo wrote: post #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? 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 :)

I don’t get it. There are already plenty of public companies that pay extremely predictable dividends. This is a popular investment type for retirement portfolios, among others.

Why should they be on a separate exchange?

Re: The Long-Term Stock Exchange Opens for Business

#15

Post by bob33212 »

sfard wrote: post #4

I 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?

It looks like a SaaS analytics platform. Maybe they will have different data than normal Quarterly reports coming in from companies who want to be part of the exchange.

Re: The Long-Term Stock Exchange Opens for Business

#17

Post by imagin8or »

Maximus9000 wrote: post #11
sfard wrote: post #4

I 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?

Me too. According to the wiki page: > Operating principles: In an earlier SEC filing, LTSE said that its corporate governance rules might include: increased voting rights for shareholders who hold company stock for long periods of time, restrictions on offering short-term incentives to executives, disclosure of impact of any stock buybacks, and requiring companies to have a board-level long-term product and strategy…

So you make a fund which holds the stock of the listed company long-term, and trade the fund as normal... this doesn't seem robust yet.

Re: The Long-Term Stock Exchange Opens for Business

#18

Post by m12k »

picodguyo wrote: post #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? Shareho…

I think this is less about attracting investors who think long-term than it is about telling investors who think short-term to go somewhere else.

Re: The Long-Term Stock Exchange Opens for Business

#19

Post by cat199 »

AznHisoka wrote: post #8
picodguyo wrote: post #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? 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 :)

> if there was an exchange that required every company to pay a fixed percentage of their cash flows every year after X years

wouldn't this be roughly the same as bond markets?

Re: The Long-Term Stock Exchange Opens for Business

#20

Post by tomhoward »

picodguyo wrote: post #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? Shareho…

The pressure comes from investors. (The board is elected by shareholders, so in theory they represent the wishes of investors).

It's extremely difficult/rare to find investors who will just sit back and trust the CEO run the company as they see fit, particularly in a world where "unicorns" are going from zero to $billions in a few years. It happens occasionally, but only in the case of extreme outlier companies where the company is already a rocketship and thus the CEO/has already proven themselves - e.g., Apple/Jobs-post-mid-2000s, Facebook/Zuckerberg.

Whilst plenty of companies could reach huge scale over a longer period of time, it can be difficult for investors/outsiders (and indeed the management themselves) to know whether their company really is a slow-building long-term winner vs a zombie.

Perhaps what the LTSE is doing is attracting investors who are willing to be patient over a slow/long-term build, but to also work with the companies to ensure they really are on a path to long-term success and not in zombie mode.

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