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by teemwerk
3165 days ago
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I am by no means stating it as a conclusion, but rather just as a discussion point, how does this differ from the mutual funds and etfs under a single umbrella, i.e. something like vanguard? Where the stated mission is sort of long term stewardship over the short term activist role. Now, how well that mission is fulfilled is another thing. The reason I note vanguard specifically is because of the current activist spat between P&G and Nelson Peltz/Trian Partners. Of the top 3 holders (vanguard, black rock, state street), only vanguard voted against the activist shakeup. I guess I'm just having trouble seeing the difference between giving a bunch of small investors more power, vs a large amount of krill with similar goals making up a whale the company can't ignore. It seems the tenure setup complicates a lot without immediately perceptible benefit, at least to me. |
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You should check out John Bogle's "Clash of Cultures" (founder of Vanguard), he discusses this problem at length.
In general I'm inclined to agree with you though. This thing has a lot of hype around it because it's backed by Eric Ries, the "Lean Startup" author, but I don't really see a problem with the NYSE/Nasdaq in their current form. People overlook the liquidity, depth, and other benefits of such well-run exchanges; it's not at all clear to me that an average investor would be better off on this "long-term" exchange, where I'm sure volumes will be a lot lower, and bid/ask spreads will be wider than on a "bad" exchange with many "short-term" players, who, as a side-effect of their actions, create tons of liquidity for small-potatoes investors.
Frankly, I don't understand the point of this at all. There's nothing stopping a long-term oriented investor from holding shares a long period of time in today's markets. And there are real risks of corporations being too long-term focused. The existence of Amazon, at a minimum, should show that companies with 10-20 year investment horizons are tenable under the current system.