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U.S. regulators approve the Long-Term Stock Exchange

reuters.com

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Re: U.S. regulators approve the Long-Term Stock Exchange

#61

Post by gjs278 »

eanzenberg wrote: post #48
elamje wrote: post #42

Earlier quoted context omitted.

> Of course, I do think it can serve a useful purpose, but there is reason early-stage, private investment is restricted to qualified investors. The expected value of early stage investing is certainly higher than lotteries in the US. Every poor Joe can spend thousands on lottery tickets that expire worthless, but cannot invest thousands in real companies that Joe believes will do very well in the future. Shouldn't J…

Yes, and he can become an accredited investor which has regulations tied around it. Safeguards are needed so your Average Joe doesn't squander his family's $500k retirement and become dependent on the govt's teat.

there doesn’t need to be a single regulation about what anyone purchases. forcing joe to go through a middleman is what you are causing instead. and then he has to pay a jacked up rate. but he can still do it. straw purchases happen all the time.

Re: U.S. regulators approve the Long-Term Stock Exchange

#62

Post by bufferoverflow »

mises wrote: post #38
tmugavero wrote: post #6

Excited to see this. I hope it leads to a trend to listing sooner and giving access to retail investors much earlier. Buying Uber at a few dollars instead of $42 for example. The markets will operate like they want to unless there are explicit rules to stop it. Right now it's wait to IPO as long as possible, and HFT only accessible to huge companies. Retail is left with the scraps.

Retail is left with "the scraps" because it is much riskier to invest early on. Companies that fail early aren't heard about as much, because Joe Average's pension plan hasn't invested in them, but are still plentiful. And maybe Joe Average's pension plan shouldn't be investing in what are effectively PE-stage firms. I don't know if I'm right about this, but it seems such an exchange might contribute to something lik…

A Joe Average is legally allowed to walk into a casino and lose all his money, pretty much guaranteed over long term.

A Joe Average is legally allowed to play all kinds of lotteries, pretty much guaranteed loss over long term.

A Joe Average is legally allowed to invest his 401k in the riskiest penny stock one can find.

This has nothing to do with risk, it's 100% gate keeping.

Re: U.S. regulators approve the Long-Term Stock Exchange

#63

Post by basicplus2 »

immichaelwang wrote: post #5

What are the downsides of this?

opening up the opportunity to take money from a whole new source, by accepting money from unsophisticated investors who dont understand what they are getting into and losing liquidity on their investment at best and losing their money at worst

Re: U.S. regulators approve the Long-Term Stock Exchange

#64

Post by trophycase »

bufferoverflow wrote: post #62
mises wrote: post #38

Earlier quoted context omitted.

Retail is left with "the scraps" because it is much riskier to invest early on. Companies that fail early aren't heard about as much, because Joe Average's pension plan hasn't invested in them, but are still plentiful. And maybe Joe Average's pension plan shouldn't be investing in what are effectively PE-stage firms. I don't know if I'm right about this, but it seems such an exchange might contribute to something lik…

A Joe Average is legally allowed to walk into a casino and lose all his money, pretty much guaranteed over long term. A Joe Average is legally allowed to play all kinds of lotteries, pretty much guaranteed loss over long term. A Joe Average is legally allowed to invest his 401k in the riskiest penny stock one can find. This has nothing to do with risk, it's 100% gate keeping.

Yep, penny stocks, options and margin trading are all available to a retail investor. But hey, I want to invest in a new business? I want to buy Bitcoin? I want to participate in an ICO? Sorry. It's all about gatekeeping and not letting me do what I want with my money.

Re: U.S. regulators approve the Long-Term Stock Exchange

#65

Post by platz »

fallingfrog wrote: post #55

Why don’t we just levy a 5% tax on every stock trade? That would provide a lot of funding and also get rid of front running, flash crashes, and a lot of kinds of market manipulation in a hurry. It would also make sure that any stock trade was with the intent of making longer term investments.

Probably also kill the dollar as global reserve currency

Re: U.S. regulators approve the Long-Term Stock Exchange

#66

Post by sokoloff »

thaumasiotes wrote: post #49
elamje wrote: post #42

Earlier quoted context omitted.

> Of course, I do think it can serve a useful purpose, but there is reason early-stage, private investment is restricted to qualified investors. The expected value of early stage investing is certainly higher than lotteries in the US. Every poor Joe can spend thousands on lottery tickets that expire worthless, but cannot invest thousands in real companies that Joe believes will do very well in the future. Shouldn't J…

But the revenue from Joe would then go to early-stage companies, not the government.

I think what you'd find is that Joe's money would go to shysters who are today turned off by the prospect by forfeiting their money and sitting the rest of their lives in federal prison (so they become telemarkets, roofing repair dudes that follow hurricanes around, or late-night TV hucksters).

Re: U.S. regulators approve the Long-Term Stock Exchange

#67

Post by username223 »

fallingfrog wrote: post #55

Why don’t we just levy a 5% tax on every stock trade? That would provide a lot of funding and also get rid of front running, flash crashes, and a lot of kinds of market manipulation in a hurry. It would also make sure that any stock trade was with the intent of making longer term investments.

Even 0.1% would probably be enough to tamp down most HFT.

Unfortunately, this exchange doesn't seem to be aimed at that:

> The LTSE is a bid to build a stock exchange... that appeals to hot startups, particularly those that are money-losing...

> ... giving retail investors a chance to cash in on high-growth startups.

That sounds like a private lottery at best, and a scam at worst. Maybe it wouldn't seem so bad if I read through the full SEC document, but I'll steer clear of this until plenty of other people have tried it out.

Re: U.S. regulators approve the Long-Term Stock Exchange

#69

Post by dev_throw »

eanzenberg wrote: post #54
thaumasiotes wrote: post #51

Earlier quoted context omitted.

Wouldn't those safeguards be at least as necessary for lottery tickets?

Only degenerates throw $500k away at lottery tix, while significant amounts of the population invest their entire $500k in funds as found in 401k's or IRAs (or whatever). So yeah, I'd rather shield most of the country from the volatility of early stage shitfests, and make that bar high to climb if they really truly want to invest in early-stage.

Then make them take some tests to get accredited rather than an arbitrary income barrier, or net worth gatekeeping. According to that logic, someone with $2M net worth is just as likely to lose their shirt as someone with $50k net worth if they put their entire worth into a losing fund.

Re: U.S. regulators approve the Long-Term Stock Exchange

#70

Post by ianai »

Animats wrote: post #53
evrydayhustling wrote: post #40

Anybody have a good, technical/professional doc on how the LTSE mechanisms work? Some of this seems crazy, but smart people have looked at it. Example: It seems like stock transfer would reset voting rights, which should depress prices and (intentionally, I think?) discourage sale. But what keeps a fund that owns vested shares from effectively selling their economics and voting rights through a secondary contract?

Here's the exchange rulebook.[1] This is rather long. I haven't found the "long term" part yet. It appears to function as an ordinary short-term exchange. It's not like stocks trade once a minute or once an hour to eliminate high-speed trading. They allow day trading and margin. There have been proposals for exchanges designed to discourage short term churn, but this doesn't seem to be one of them. The web site seems…

Fta:”The new exchange would have extra rules designed to encourage companies to focus on long-term innovation rather than the grind of quarterly earnings reports by asking companies to limit executive bonuses that award short-term accomplishments.

It would also require more disclosure to investors about meeting key milestones and plans, and reward long-term shareholders by giving them more voting power the longer they hold the stock.”

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