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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

#71

Post by crazygringo »

Any investor who limits themselves to the "long-term" is doing nothing more than allowing execs to get away with bad behavior.

There is absolutely zero evidence that current stock prices don't price in the long-term. Indeed, if there were, savvy investors would arbitrage for that... and then it would no longer be the case. This is pretty much by definition, just Econ 101. (Also, somebody who thinks stocks are biased to the short-term... please explain AMZN's valuations over the past two decades.)

The only people calling for limiting investor ability to sell are executives of companies themselves, who are afraid of accountability from investors. Because sometimes CEO's would rather be lazy or work on their fun (yet unjustifiable) pet projects, than actually build a profitable, sustainable business like investors want. (It's just human nature.)

A "long-term stock exchange" is one of the greatest cons ever played by execs. It is good only for management, at the expense of investors, customers, and everyone else generally. It is simply the removal of accountability, which can never be a good thing.

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

#72

Post by LgWoodenBadger »

crazygringo wrote: post #71

Any investor who limits themselves to the "long-term" is doing nothing more than allowing execs to get away with bad behavior. There is absolutely zero evidence that current stock prices don't price in the long-term. Indeed, if there were, savvy investors would arbitrage for that... and then it would no longer be the case. This is pretty much by definition, just Econ 101. (Also, somebody who thinks stocks are biased…

Doesn’t that same accountability today result in execs selling out the long-term for short-term gains, also for their own benefit at the expense of shareholders?

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

#73

Post by crazygringo »

LgWoodenBadger wrote: post #72
crazygringo wrote: post #71

Any investor who limits themselves to the "long-term" is doing nothing more than allowing execs to get away with bad behavior. There is absolutely zero evidence that current stock prices don't price in the long-term. Indeed, if there were, savvy investors would arbitrage for that... and then it would no longer be the case. This is pretty much by definition, just Econ 101. (Also, somebody who thinks stocks are biased…

Doesn’t that same accountability today result in execs selling out the long-term for short-term gains, also for their own benefit at the expense of shareholders?

That's certainly a tricky question which essentially is connected to their "insider information", but the answer certainly doesn't rely on limiting others' ability to sell.

Solutions to that generally involve long-term vesting periods for executive shares, e.g. executives can't sell their shares for some extended period of time that is sufficiently "long-term". If the board really made sure incentives were aligned, ideally it would be some period of years after they left the company, so they could never sell while they were in a position to influence the value of shares.

But again, there is absolutely zero reason that should ever apply to someone without insider information, i.e. investors generally.

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

#74

Post by fallingfrog »

platz wrote: post #65
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

I mean that will happen in a decade or so anyway, so

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

#75

Post by [deleted] »

username223 wrote: post #67
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 r…

[deleted]

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

#77

Post by hendzen »

caprese wrote: post #15

Is this more than a Regulation ATS approval? If this is a national stock exchange, then that would be fitting for silicon valley and California. If bankers here would like to take other parts of the transaction for IPOs and direct listings it could really be a boon for the state and remove a lot of the pressure from New York investment banks, as California is economically larger than other most countries with relevan…

nope this is a real national securities exchange approval: https://www.sec.gov/rules/other/2019/34-85828.pdf

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

#78

Post by k_sh »

baybal2 wrote: post #43
mises wrote: post #39

Earlier quoted context omitted.

> I myself vehemently oppose the idea of collective ownership of means of production, which public companies embody I wouldn't call this "public" ownership, as the "public" does not own a company. Investors own a company, the pool of investors is simply enlarged such that the public may invest.

In my understanding, collective ownership !== public ownership and is just anything where the amount of owners is > 1

I've always taken "public ownership" to imply "publicly-traded company", which means John Q. Public can call up his broker and buy some shares in the company.

This in contrast to privately-held companies, which can and do have many owners, but whose owners are acquired through partnership, investment, key employees within the company, and M&A - but not through the sale of securities.

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

#80

Post by evrydayhustling »

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…

Thanks and wow... It's a lot. Looks like they have a set of commitments about owners declaring change of control, and some investigative powers to figure out if someone is circumventing rules. It's a really interesting idea but feels like it will need a decade of experiments to see what works.
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