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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

#461

Post by superqd »

smabie wrote: post #441
superqd wrote: post #79

Hmmm, a bit disappointed after reading their blog and site. I expected that they'd integrated some clever rules around stock trading itself in order to force, or encourage, long term thinking. I expected something along the lines of, "no shorting allowed", "stocks must be held a minimum of 6 months", etc. There was nothing like that, all they have is the rule, "come on guys, think long term". I fail to see how this w…

How does preventing shorting express a long-term view?

Apologies, shorting-bans isn't necessarily a long-term view rule, just an example of something they could do around constraints on trading, not necessarily something they should do, just I expected some kind of trading rules to fix the real problem, which in my opinion is investor pressure, not management short-sightedness.

Re: The Long-Term Stock Exchange Opens for Business

#462

Post by Terr_ »

qeternity wrote: post #318
Terr_ wrote: post #313

Earlier quoted context omitted.

> Two of the largest companies in the world Survivorship bias?

No, because the whole premise here is that investor behavior prevents this kind of bias. You can't take the whole argument and then cast massive, glaring contradictions to the core premise as merely bias.

I think we have a communication hitch here:

> the whole premise here is that investor behavior prevents [survivorship] bias

WTF? How the heck is some "investor behavior" supposed to prevent you (or I, or anybody) from succumbing to a common human mistake made when analyzing data and discussing it here in the comments-section?

> You can't take the whole argument and then cast massive, glaring contradictions to the core premise as merely bias.

Back up: You're using a straw-man argument, a false version created out of black-and-white absolutes, rather than trends and high probabilities.

___________

Consider this fictional conversation:

A: "Playing the lottery is a sucker's game, you're almost guaranteed to go bankrupt."

B: "But look! These people bought a lot of tickets and won! They're multi-millionaires now!"

A: "That's survivorship bias. You're not considering the huge numbers of not-so-notable people who lost money instead."

B: "No it's a massive glaring contradiction to your core premise! You can't brush it off as bias!"

Re: The Long-Term Stock Exchange Opens for Business

#463

Post by aisofteng »

edoceo wrote: post #314
eries wrote: post #221

Earlier quoted context omitted.

Leaving aside some of your odd claims, I’m happy to answer the question. Our definitions and standards are laid out in excruciating detail in our hundreds of pages of legal filings. Here’s a good place to start if you are interested: https://www.sec.gov/rules/sro/ltse/2019/34-86327.pdf Also this may be of some interest: https://longtermstockexchange.com/static/principals_for_lt_s...

The second link, shows this on the second page ""Long-term focused companies should measure success in years and decades and prioritize long-term decision-making"" So, maybe the short answer is that? And the longer answer is 28 pages laying out details.

Indeed, often legal language is left as open to interpretation when new so that the manifestation of reality can polish it over time. This is a new venture; being imprecise about “long-term” now is, in my interpretation, the right move, because it should be refined over time based on how this all plays out.

The idea is good, in my opinion, and will develop over time to become more concrete, most likely.

Re: The Long-Term Stock Exchange Opens for Business

#464

Post by unityByFreedom »

AmericanChopper wrote: post #456
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…

> 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.

Re: The Long-Term Stock Exchange Opens for Business

#465

Post by lappa »

om2 wrote: post #449

The blog post doesn’t explain what, if anything, is different about how the market works. From the name, I expected that it would require holding an investment for a minimum period. But I see no evidence of that elsewhere on the site. I do see listing requirements that supposedly require companies to have a long term focus. But then elsewhere I see that all securities in the S&P 500 and the RUSSEL 2000 index will be…

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 to see how this new voting structure might result in strange behavior by traders and investors. For example, will people use single stock futures to hedge while retaining their voting rights? Will special purpose vehicles for holding shares be created?

Re: The Long-Term Stock Exchange Opens for Business

#466

Post by R0b0t1 »

cthalupa wrote: post #416
R0b0t1 wrote: post #243

Earlier quoted context omitted.

Yes, it is (probably) related to Indian/Native American reservations, but that does not mean every utterance of an allusion to history is perpetuating racial injustice. Frankly having people like yourself chime in at every juncture to tell other people they are perpetuating racism is cheapening the actual historical impact of these events. If you care about the people you claim to defend then do something to help the…

>Frankly having people like yourself chime in at every juncture to tell other people they are perpetuating racism is cheapening the actual historical impact of these events. That's an interesting take, and not one that I think you will find in common with experts on the subject. >If you care about the people you claim to defend then do something to help them. I donate my time, money, and other resources to a variety…

>That's an interesting take, and not one that I think you will find in common with experts on the subject.

Many of these "experts" typically use outrage to justify their continued employment. Most of them come off as genuinely deranged to most of the people I know, so this isn't just a me thing.

>I might largely be wasting my time in attempting to educate people on the internet

You're not educating people so much as finding chances to belittle them.

>Why do you believe that uttering phrases that are fundamentally rooted and reinforce prejudice is not harmful?

You're trying to tell someone they are racist while not holding any racist opinion but for saying magic words. This is nonsensical. If black people call each other "the n word" then a word and its historical meaning and modern meanings are not necessarily linked to each other.

More empowering is, likely, accepting that a word or phrase may have had some racist element to it but removing the power of that racism (such as with black people calling each other the n word) as opposed to making it forbidden.

Re: The Long-Term Stock Exchange Opens for Business

#467

Post by b20000 »

smabie wrote: post #437
b20000 wrote: post #118

where are the VCs that share this vision? when I tried to raise capital on a long term vision for our hardware startup I got laughed at.

I dunno, it seems like most VCs care about long-term visions. I mean, look at Uber and such. Still unprofitable.

it's like with banks. once they've put in a substantial amount of money, they can't pull out anymore. it's a case of "too big to fail".

Re: The Long-Term Stock Exchange Opens for Business

#468

Post by superqd »

cactus2093 wrote: post #124
superqd wrote: post #79

Hmmm, a bit disappointed after reading their blog and site. I expected that they'd integrated some clever rules around stock trading itself in order to force, or encourage, long term thinking. I expected something along the lines of, "no shorting allowed", "stocks must be held a minimum of 6 months", etc. There was nothing like that, all they have is the rule, "come on guys, think long term". I fail to see how this w…

Why is shorting not consistent with long-term thinking? You can think a company or industry will decline over a long-term horizon, just as much as you can think it will grow. It seems like the symmetry of being able to be either short or long on a company is a useful part of the market signal. I'm also not sure "hold for 6 months" is particularly useful. A lot of people are already investing on that timeline today an…

Apologies, shorting-bans isn't necessarily a long-term view rule, just an example of something they could do around constraints on trading, not necessarily something they should do, just I expected some kind of trading rules to fix the real problem, which in my opinion is investor pressure, not management short-sightedness.

The rules I suggested aren't necessarily good rules, just random examples. That is, to me the most powerful driver for short term thinking isn't managerial in nature, it's investor in nature. That is, it's the short term fluctuations in market value as investor reactions to events or goals that have nothing to do with the company's bottom line or long term goals, etc. But if essentially random forces are affecting the value of your company, there will exist pressure on management to respond to that pressure. So to me the real fix is some set of rules constraining investor behavior with regards to how the stock is traded, not some nebulous honor-code among CEOs. I am not sure what the rules should be, I just picked random rules out of my butt. But I think there should be some trading constraints: if you truly want to incentivize long term vision, you have to remove the short term pressures.

Like your suggestion for a trading window every 5 years. I have no idea how well that would work, but it seems reasonable, and is the sort of thing I expected for the site, but they seem not to have anything like that in mind. Which to me means that have entirely missed the mark.

Re: The Long-Term Stock Exchange Opens for Business

#469

Post by lostcolony »

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…

'- How is LTSE different? Seems like: Companies and investors “promise” to have a longer term focus via planning'

I don't think "promise" is the word. The fact the exchange says it's focused on long term, would incline companies that wanted to focus on long term to list themselves there. Likewise, it would incline customers to list themselves there. But what incentive is there for short term traders?

Right now, on the normal exchanges, you have both types. And the loudest voices in the room are the short term types. They're the ones paying the closest attention, attending the shareholder meetings, etc. The long term holders are far less engaged.

What does this have for those short term traders? Nothing. There's no reason to pile into this when all the incentives of the companies listing, and existing holders, are aligned to long term. If you're looking short term, why would you want this, knowing all the other players will be aligned to take hits in the short term, if it pays off long term?

Not saying that this will be successful, but I can see it working because of that. Not because it's more attractive to long term holders, but because it's less attractive to short term.

That said, agreed that some ways to enforce it would be nice. But those have some noticeable downsides too (i.e., if a company makes decisions you don't agree with, but you're locked into a hold position...).

That said, as was mentioned elsewhere, it sounds like voting power is tied to how long you've held, as well as number of shares. So that certainly helps silent the churn and burn voices.

Re: The Long-Term Stock Exchange Opens for Business

#470

Post by aisofteng »

itsoktocry wrote: post #315

This seems like a wonderful idea that the world needs. But until I can see a list of companies that are "accepted", it's hard to know if it's all just lip service. There are a few companies in the tech sphere I can think of off the top of my head that many consider "long term thinkers" that others would consider nothing of the sort.

I think IBM is one.
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