Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Long-Term Stock Exchange Opens for Business

blog.ltse.com

Post reply on HN
Print view View original

491–500 of 561 posts

Re: The Long-Term Stock Exchange Opens for Business

#491

Post by om2 »

lappa wrote: post #483
om2 wrote: post #473

Earlier quoted context omitted.

That changed voting structure sounds interesting. I could not find any reference to this on the website. Where should I look for more info? Also, would this apply only to securities actually listed on LTSE or also, somehow, to non-LTSE listed securities bought on LTSE (which apparently is the only thing possible to do so far(.

The SEC supported the validity of LTSEs Voting Rights Policy [0]. Eric Reis has clarified time-phase voting won't be mandatory [1], however the LTSE is facilitating technological / legal support for the implementation of such voting structures without directly endorsing them (presumably for legal reasons) [2]. >Also, would this apply only to securities actually listed on LTSE or also, somehow, to non-LTSE listed secu…

From the linked article and FAQ, it sounds like this was once meant to be a differentiator, but the Voting Rights Policy mentioned in that SEC document is no longer a rule of the exchange, and tenured voting rights are not a listing requirement. Also not clear if other exchanges would disallow such voting rights.

Besides the complications this would raise that you mentioned, I also wonder how companies would even track tenure of ownership, since many (most?) shares of stock are not directly held and so the company may not even know who the nominal shareholder is or when transfers take place.

Re: The Long-Term Stock Exchange Opens for Business

#492

Post by fluffything »

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…

> & 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 long term).

Also for options, one would need to always require traders to be covered with the actual stock.

Re: The Long-Term Stock Exchange Opens for Business

#493

Post by WalterBright »

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 the market valuations?

The reality must be, as soon as investors realize a company is short-term only, they dump and run from its stock, because they will be unable to trick someone else into buying it at the high price.

Some years ago, I knew the CEO of a company who said he did the financials "according to what Wall Street short term investors wanted". The stock promptly tanked as investors actually do not invest that way, and certainly don't want to invest in companies that eat their seed corn.

Take a look at the companies with the biggest market caps in the world - who thinks they are driven by short-term thinking? I don't. The investors obviously don't. And the rewards of long-term thinking are off the charts.

Re: The Long-Term Stock Exchange Opens for Business

#494

Post by erfgh »

BiteCode_dev wrote: post #40

Genuine question, what good does the ability to buy and sell stock on the short term do for humanity ? Does it have any specific vertue appart from allowing one to make make money by betting correctly ? Why are not all sales required to be long term ?

If there was no short term market then long term buyers and sellers would have a harder time buying and selling and it would cost them significantly more.

Re: The Long-Term Stock Exchange Opens for Business

#495

Post by tlholaday »

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.

The loss of accrued value is a disincentive to sell, and sell-disincentives are a feature, not a big.

Re: The Long-Term Stock Exchange Opens for Business

#496

Post by michaelt »

fluffything wrote: post #492
cmroanirgo wrote: post #478

Earlier quoted context omitted.

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…

> & 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?

Re: The Long-Term Stock Exchange Opens for Business

#497

Post by roguecoder »

bobcostas55 wrote: post #193
eries wrote: post #186

Earlier quoted context omitted.

I don’t think multiples are the issue. The question is: are companies set up to support a philology of long-term decision making? Talk to almost any middle manager in any public company in America if you are confused about whether this is the common case today

If investors are not irrational about the long term, then I don't see how there can be a problem. Prices will correctly reflect long-term expectations, and managers who are paid in options/hold equity will face the right set of incentives. If managers focus on the short term it's probably because it maximizes long-term value.

What evidence do you have that investors are not irrational about the long term?

Re: The Long-Term Stock Exchange Opens for Business

#498

Post by dangerface »

eries wrote: post #221
dangerface wrote: post #209

> adopt corporate governance that aligns their behavior and incentives to the long term. What does this mean? What quantitive measures are you using to qualify long term incentives and behaviours? No offence but you don't seem to have an answer to this question. For example is RDSA long term? They have been around for ever and people will need cars and oils for the forseable future at least 10 years is this long term…

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 principals for it success white paper was what I was looking for, thank you.

Re: The Long-Term Stock Exchange Opens for Business

#499

Post by yholio »

fluffything wrote: post #492
cmroanirgo wrote: post #478

Earlier quoted context omitted.

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…

> & 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…

Not only it's a bad idea to ban shorting, but it's almost impossible to do outside regulatory action by the SEC and even then.

Shorting is essentially borrowing the control of stock to some other party. That's it. It doesn't have to be done on the market, it can be done in a private, confidential contract where I oblige myself to sell my stock when directed to do so by yourself, provided adequate warranties exist that you will cover the price difference when I want to purchase it back.

For this ceding of control, I get paid. The market only "sees" regular buying and selling of stock.

Re: The Long-Term Stock Exchange Opens for Business

#500

Post by roguecoder »

ismail wrote: post #356
eries wrote: post #273

Earlier quoted context omitted.

I don't understand this criticism. We are actively trading stocks today: https://markets.cboe.com/us/equities/market_share/ You can call your broker right now and ask them to direct your orders to a specific exchange, including "L" on the SIP.

Eric, you are a smart guy. I think you should pay attention to the signal. Multiple people have mentioned a similar thing. I have had a similar experience. While it may be technically accurate that the “LTSE is open for business” My expectation and others also seem to have had a similar expectation after reading the announcement was: We can now purchase shares in companies that are listed on the LTSE. Having tried to…

I don't know why you would assume that a stock exchange being "open for business" meant having a company listed. If you have a company to list, LTSE is now a place you could take it public. Yesterday that wasn't true.

Maybe it's people used to stock exchanges treating companies as the product, instead of as their customers? If so, you seem to be demonstrating the problem LTSE is trying to solve.

Post reply on HN