321–330 of 491 posts
Earlier quoted context omitted.
SPY is an ETF and SPX is an index. The distinction is material. /ES does not trade between 5pm and 6pm ET. SPX options aren't marked until 8:15 PM ET. It's more plausible that large caps see MWF, then MTWHF possibly.
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Well, this is going to make insider information a lot more powerful... You've got 364 days in between the truth, and if you think a company is fudging it's numbers you've got to wait another 365 before anything else comes out.
Earlier quoted context omitted.
Dollars/receivables in and dollars/deliverables out is just a question of rate, unless I'm missing something. If a 10 billion dollar company has a per-second dollar out/in rate of $1,000,000 due to actual organic business, a company with $2,000,000 can set up an LLC it buys and sells from, and legally 'swap' $1,000,000 a second back and forth in services "bought and sold" to mimic the appearance of the $10B company,…
Extreme? Almost every AI related stock is investing in companies that then buy their product, efectively just giving stuff for free in exchange for better quarterly numbers.
Earlier quoted context omitted.
It's not actually fraud if there is some ostensible service they're performing. Business units within businesses 'pay' each other for 'services' all the time. Ditto for subsidiaries. Whether something is fraud might come down to intent alone. The line between legal and illegal business transactions can be murky as hell.
For it to not be fraud you'd have to actually exchange services proportional to the line items. That isn't what was described. Falsifying line items to juice your numbers is fraud plain and simple.
Simultaneously they are opening up 0DTE options on certain stocks starting with large market caps but don't be surprised when this expands. Currently this was limited to large etfs like SPX. They are also extending trading hours towards 24/7 and eventually 365. How they square increasing liquidity with delaying information is insane. I know there is a lot of manipulation to make quarterly numbers and the tax code is…
SPY is an ETF and SPX is an index. The distinction is material. /ES does not trade between 5pm and 6pm ET. SPX options aren't marked until 8:15 PM ET. It's more plausible that large caps see MWF, then MTWHF possibly.
T+0 all-year-round trading is good in many ways bad in others —like losing the real investor liquidity spawning window at 09:30 EST as opposed to pure market making.
Quarterly earnings were already a bad fit for many businesses so I agree with the measure to do away with them in principle. Someone proposed real-time and I think that would be a net positive if not very feasible. Yearly is a good compromise.
Companies that are not profitable YoY usually have a story so they probably can avoid having to rob Peter to pay Paul.
Then again, maybe everyone adapts and yearlies turn into the next quarterlies.
Earlier quoted context omitted.
Help me understand what you are saying here. For those that don't know this one is "a measure becomes a target, it ceases to be a good measure". I'm not advocating for a single metric that can be gamed. A business is fundamentally about dollars in and dollars out. Maybe add receivables in there and a few other metrics from the P&L. I'm not trying to be prescriptive here on purely cash in and out. I do think there is…
Dollars/receivables in and dollars/deliverables out is just a question of rate, unless I'm missing something. If a 10 billion dollar company has a per-second dollar out/in rate of $1,000,000 due to actual organic business, a company with $2,000,000 can set up an LLC it buys and sells from, and legally 'swap' $1,000,000 a second back and forth in services "bought and sold" to mimic the appearance of the $10B company,…
Earlier quoted context omitted.
It's not actually fraud if there is some ostensible service they're performing. Business units within businesses 'pay' each other for 'services' all the time. Ditto for subsidiaries. Whether something is fraud might come down to intent alone. The line between legal and illegal business transactions can be murky as hell.
For it to not be fraud you'd have to actually exchange services proportional to the line items. That isn't what was described. Falsifying line items to juice your numbers is fraud plain and simple.
Earlier quoted context omitted.
Extreme? Almost every AI related stock is investing in companies that then buy their product, efectively just giving stuff for free in exchange for better quarterly numbers.
And thus we keep talking about AI bubble and when it bursts, not if it bursts
My personal opinion? The bubble burst will make 2007ff look harmless in comparison.
Earlier quoted context omitted.
Yes, maybe. The optimal number of scandals is sadly not zero, and any given piece of legislation tends to overreact, fighting the last battle without seeing all the potential second-order consequences. Even the most carefully-crafted laws are worth giving another look, periodically. Note that FTX, for example, was privately held. If it had been born in the nineties, the norm would be for it to go public, and have at…
But Enron's bankruptcy affected people who could invest on the public market while FTX affected more directly "qualified investors" didn't it? It seems the private/public split along the lines of "public companies should be more scrutinized" worked as intended.
One could make the valid point that those pension funds shouldn't have been (indirectly) invested in those privately-owned unicorns to begin with, but doing that would have most probably come with opportunity costs for those pension funds (as for some reason or another private big companies have been seen as bringing in more money for each dollar spent compared to big public companies, at least when it comes to the last 8-10 years).
As the OP implies, there needs to be some sort of balance between public and private companies, each of them need to be, in effect, more like the other in the eyes of the State/taxman, State-run regulators and the like.
One of my favorite stories about logistics and quarterly earnings deadlines (from when I worked at a pharmaceutical company: "In our business, a truckload of various drugs can easily reach $10-$15 million. Now, if that truck arrives at the depot at 11:59pm March 31st then it's first quarter earnings. If it arrives at 12:01am April 1st then it's second quarter earnings. $15 million is a BIG shortfall, even for us, so…
That's not something I'd be proud of.