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The Long-Term Stock Exchange Is Worth a Shot

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Re: The Long-Term Stock Exchange Is Worth a Shot

#111

Post by danmaz74 »

grondilu wrote: post #91
danmaz74 wrote: post #85

Earlier quoted context omitted.

Are those dark markets contracts enforceable? By the way, this is nothing like communism, not even close. This is a perfectly market oriented solution, if you don't like the idea, don't buy this kind of shares, nobody forces you to do so. If the model will prove good for companies and their investors, it will prosper, otherwise, it won't.

> Are those dark markets contracts enforceable? Of course they are. When absurd laws try to prohibit market forces, shadow markets emerge and they tend to have their own enforcement policies. Think mafia, prohibition in the 20s, corruption and stuff. Things get ugly, but they get done. The point of having regulated markets is precisely to put some order and fairness into this. > This is a perfectly market oriented so…

So basically a free market is free as long as it only creates contracts that you like, otherwise it's communism. Ok.

Re: The Long-Term Stock Exchange Is Worth a Shot

#112

Post by nradov »

erikb wrote: post #101
timthelion wrote: post #16

This article misses the reason why short term investors are potentially harmfull. The author writes: "One basic and important implication of this theory is that, if you hold a share of stock for a minute, you will want the company to increase its long-term earnings power during that minute. If, during your minute of ownership, the company announces "we have sold all our factories and ruined our productive capacity, b…

What I don't understand yet, is why the company would care about the short term investor. Sure the short term fluctuations are high. But on the long term they should average out based on average long term value of the company. Shouldn't the CEO just ignore the stock price swings?

Yes. Short-term investors get unfairly blamed for problems that are caused by incompetent CEOs.

Re: The Long-Term Stock Exchange Is Worth a Shot

#113

Post by nradov »

Yizahi wrote: post #83
timthelion wrote: post #16

This article misses the reason why short term investors are potentially harmfull. The author writes: "One basic and important implication of this theory is that, if you hold a share of stock for a minute, you will want the company to increase its long-term earnings power during that minute. If, during your minute of ownership, the company announces "we have sold all our factories and ruined our productive capacity, b…

Exactly this. I'm observing how a midsized company shares fluctuate completely unrelated to the progress of our development efforts and actual relations and sales to customers. Product A was frozen and discarded after 2 year intense dev cycle (a failure), product B is not faring well in the competition, but we announced product C that may or may not succeed in 1+ years on a major tech show - shares go up. Next year p…

PR is nothing. The institutional investors who actually move stock prices barely even look at it. Humans try to make sense of random events by looking for causality, but ascribing stock movements to single factors is often like ascribing weather changes to animal sacrifices.

Re: The Long-Term Stock Exchange Is Worth a Shot

#114

Post by andreasklinger »

jshaqaw wrote: post #67
andreasklinger wrote: post #45

Earlier quoted context omitted.

Explicit expectations by the market towards the leadership. As in: Do not worry about quarterly profits but longterm success

Does anyone report to you? If they do, how would you respond if they said “I’d like to check in with you on my progress/metrics/etc... just once a year.” Sound like a good idea? It’s a terrible idea for managing people and a terrible idea for corporate governance. As high performance organizations move to daily if internal accountability it’s laughable that they complain accountability every 90 days to them owners of…

there is a difference between long term planning and short term execution

yes short term execution should be monitored but it should not lead long term execution plans

Re: The Long-Term Stock Exchange Is Worth a Shot

#115

Post by kolbe »

andreasklinger wrote: post #45
kolbe wrote: post #39

Forget all the practical hurdles, tell me why this premise is even correct. Just because I've owned a share for a long time, that implies that I have more interest in the long term performance of the company going forward? Just because the word "long" is part of the description of a past action doesn't mean it's in any way correlated with an expected future action. And it's often negative. See: basketball games, reti…

Explicit expectations by the market towards the leadership. As in: Do not worry about quarterly profits but longterm success

I'm sorry, but I just don't know what you're responding to in my comment. I know about the difference between long term and short term incentives when it comes to corporations. I just don't know how the process that is being proposed does anything to help it.

Re: The Long-Term Stock Exchange Is Worth a Shot

#116

Post by valuearb »

eries wrote: post #102
dmurray wrote: post #58

Earlier quoted context omitted.

> Voting rights are powerful. That's the point of the long-term exchange. > In existing exchanges, going long and short in equal amounts on the same stock simply cancel each other out. Not really, for voting purposes. You can buy the stock, borrow the stock, sell the borrowed shares and end up with "free" voting rights and no economic exposure to the stock. I say "free" because you may have to pay someone a few perce…

Actually our mechanism prevents this. It’s pretty clever if I do say so myself, but until we go public with the details you’ll have to take my word for it

it’s a dumb idea solving an imaginary problem. Better to spend your energies on something more productive.

The governance problem is that public companies are allowed to restrict shareholder rights to the point they have no say over board composition. Boards are incestous collaborations between insiders and friendly outsiders, whose purpose is to maximize their compensation at the expense of shareholders.

That’s the problem to solve and your idea only makes it worse.

Re: The Long-Term Stock Exchange Is Worth a Shot

#117

Post by valuearb »

eries wrote: post #109
sseveran wrote: post #53

Earlier quoted context omitted.

We can get around this easily enough with a Total Return Swap. This way we can move the economic interest around with out ever moving the shares.

Our system actually handles this gracefully. If you change the beneficial owner, that’s the same as selling the shares (for voting purposes)

The beneficial owner of record will never change.

Re: The Long-Term Stock Exchange Is Worth a Shot

#118

Post by valuearb »

notahacker wrote: post #55
grandalf wrote: post #20

There is a pervasive idea that longer term investments are somehow better (morally superior, more socially responsible) than short-term. This stems from the ancient prejudice toward financiers (usually jews) and the corresponding ancient prejudice against speculation. Let me debunk it: - Suppose an 18 year old and a 80 year old each buy a share of company XYZ's stock. Whatever their goals might otherwise be, the 80 y…

Isn't the particular problem this is aiming to solve less that the founder CEOs aren't able to think in 30 year time horizons but more that sometimes they are [1], but fear that when most market participants have much higher discount rates, their position is vulnerable to activist takeovers (if the market's preferred yields are sufficiently short term, they'll get a value boost for kicking out the execs who's hockey…

Since the 1980s activist shareholders have been heavily restricted, it’s a big cause of the explosion in CEO compensation.

We need more activist shareholders, not a plan to kill off the few remaining.

Re: The Long-Term Stock Exchange Is Worth a Shot

#119

Post by valuearb »

andreasklinger wrote: post #114
jshaqaw wrote: post #67

Earlier quoted context omitted.

Does anyone report to you? If they do, how would you respond if they said “I’d like to check in with you on my progress/metrics/etc... just once a year.” Sound like a good idea? It’s a terrible idea for managing people and a terrible idea for corporate governance. As high performance organizations move to daily if internal accountability it’s laughable that they complain accountability every 90 days to them owners of…

there is a difference between long term planning and short term execution yes short term execution should be monitored but it should not lead long term execution plans

Owners should be able to decide at any moment it’s time to throw out management and start fresh.

Re: The Long-Term Stock Exchange Is Worth a Shot

#120

Post by somecontext »

Iv wrote: post #82

When I learned about high-frequency trading, I toyed with the idea of opening up a stock-exchange with different rules: - one quote per day - transactions of the day are processed in a random order (using a provable random deterministic algorithm) - shares have to be kept for at least 3 months (Warren Buffet recommends 6 months) before being sold. When Steve Jobs died, which was obviously an event that would have an…

> When Steve Jobs died, which was obviously an event that would have an impact on Apple's shares, the quotation was suspended for a day, so that people could take their time to evaluate the significance of the event.

Steve Jobs's death was announced after the closure of New York markets on October 5, 2011.

Apple stock shares traded in Frankfurt the next day: https://www.theguardian.com/technology/2011/oct/06/apple-sto...

Apple stock also traded on its primary exchange, Nasdaq, the following day with no suspensions: http://abcnews.go.com/Business/steve-jobs-death-apple-stock-...

It appears that the stock continued trading without incident in all markets following Steve Job's death, until the BATS IPO went haywire in March 2012.

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