U.S. regulators approve the Long-Term Stock Exchange • Hacker News Board

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

#81

Post by the_pwner224 » Sat, May 11, 2019, 2:13 AM UTC

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.

HFT and front running is a plague upon the markets, but there are already effective ways to stop it (order batching, and time delays like IEX does). The only reason it even exists is because the exchanges make tons of $$$ from selling access to the HFTs.

On the other hand, day traders provide valuable liquidity to the markets, making them more efficient and better for everyone. They ability to operate would be severely harmed with even a 1% fee on every trade. And more fees also harm normal people like me, who conduct trades that generally last from a few days to a few weeks each. For the most part, we're not harming other people, and we make the markets more efficient and legitimate.

The weird market effects are enabled by what is basically corruption by large entities involved with the markets, and by the ineffectiveness of the SEC at fighting a wide range of anticompetitive practices. They are caused by people who are making a small amount on every trade, but not all of the people making a small amount on every trade are bad.

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

#82

Post by rahimnathwani » Sat, May 11, 2019, 2:19 AM UTC

evrydayhustling wrote: post #80

Animats wrote: post #53

Earlier quoted context omitted.

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.

"but feels like it will need a decade of experiments to see what works"

Well, Eric literally wrote the book on that approach, so I guess that's not a problem. Sure, $19MM seems like a lot to raise before your MVP.

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

#83

Post by hellllllllooo » Sat, May 11, 2019, 2:20 AM UTC

adrianmonk wrote: post #45

ghufran_syed wrote: post #30

Earlier quoted context omitted.

I think the presumption underlying the LTSE is that short-term growth is at the expense of more valuable long-term growth, so it's structured to try and encourage long-term growth. If you don't hold that view, then you won't invest in those companies.

That certainly the goal, but I think the question being asked is whether these rule changes are sufficient to achieve it. I do feel like that make a good point about voting power. If I own a stock, and it can go up 5% now, is the promise of additional voting power later on a valuable enough thing to make me not care about that 5%? It's possible I'm in it for the long term growth, so maybe I don't care about the 5%, b…

Exactly. To make it a long term stock market there needs to be some incentives that make it so and imo the ones stated don't seem enough to deter short term thinking. Maybe there are some other rules that aren't listed in the article.

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

#84

Post by elamje » Sat, May 11, 2019, 2:47 AM UTC

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 you can do marginal accredidation based on income and/or net worth rather than nothing or anything at 200k income/2MM net worth.

It would be easy to regulate for anyone that makes, or is worth, less than "accredited" levels can only put in X% of their net worth. Doesn't need to have this arbitrary cutoff. I'd wager there are quite a few dumb people making over 200k.

An aside: Income as a method of determining "accredited"-ness is quite arbitrary. Many SWE in the valley easily qualify, where an equivalent SWE in Midwest US would not qualify, just because cost of living/wages are lower.

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

#85

Post by lostdog » Sat, May 11, 2019, 3:09 AM UTC

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.

Or just add a category of capital gains--super short-term capital gains--for holding something for minutes or hours, and tax it at 50%.

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

#86

Post by conanbatt » Sat, May 11, 2019, 3:33 AM UTC

I think there is big potential value in a new exchange that optimizes for cheap IPO'ing rules. Something between Nasdaq and Wefunder.

I'm not persuaded by some of the ideas they have (like adding diversity to their governing board, seems designed to be exclusive to tech-startups that already have a bias toward that "value"). But if only by competition they make listing cheaper and easier it could have a big impact.

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

#87

Post by im3w1l » Sat, May 11, 2019, 3:38 AM UTC

hellllllllooo wrote: post #24

I don't really see how the rules mentioned will change things that much. > asking companies to limit executive bonuses that award short-term accomplishments. Why would I care as an investor? I still want the stock to go up quickly. Executives own stock and without a cash bonus wouldn't this incentive trying to get quick increases in stock value. > more disclosure to investors about meeting key milestones and plans, a…

People worry that execs game the metrics investors use to evaluate stock. To give an example close to home, imagine if tech companies were evaluated by how many lines of code they produce per quarter. Now people are scared that execs will tell people to just write a bunch of whatever.

Making the company look good on paper (short term stock gains) but actually worse (perform worse in the long term as those lines don't translate to profit). But when these hidden faults are discovered the execs are long gone and their bonus checks already cashed.

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

#88

Post by adamsea » Sat, May 11, 2019, 3:42 AM UTC

conanbatt wrote: post #86

I think there is big potential value in a new exchange that optimizes for cheap IPO'ing rules. Something between Nasdaq and Wefunder. I'm not persuaded by some of the ideas they have (like adding diversity to their governing board, seems designed to be exclusive to tech-startups that already have a bias toward that "value"). But if only by competition they make listing cheaper and easier it could have a big impact.

> (like adding diversity to their governing board, seems designed to be exclusive to tech-startups that already have a bias toward that "value")

I do not think the bias which you think exists is reflected by the actual makeup of the boards of these tech companies, i.e., who is actually on them.

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

#89

Post by adamsea » Sat, May 11, 2019, 3:47 AM UTC

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

Does that mean you oppose all companies or business which are owned by more than a single person?

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

#90

Post by fallingfrog » Sat, May 11, 2019, 3:54 AM UTC

the_pwner224 wrote: post #81

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.

HFT and front running is a plague upon the markets, but there are already effective ways to stop it (order batching, and time delays like IEX does). The only reason it even exists is because the exchanges make tons of $$$ from selling access to the HFTs. On the other hand, day traders provide valuable liquidity to the markets, making them more efficient and better for everyone. They ability to operate would be severe…

Personally I think that there is such a thing as too much liquidity, and we are at that point now. It certainly undercuts the power of the workers in a region if its that easy to pull money out, but the people can’t leave. So the holders of the capital have all kinds of leverage (they can pull their money out in a nanosecond) but the people have none (they are stuck where they are and must take what they can get).