[tomkarlo]

Making investment less illiquid greatly increases the cost of capital, for a lot of reasons. It means you can't act on information that comes to light after the initial purchase. It also means you can't liquidate if an alternative, but better, investment comes along later (which increases the real option value you're losing by making any given investment.) Increased cost of capital means less investment, less growth, less innovation.

I'm not saying the current system is perfect, and I agree that the current system draws a disproportionate amount of talent out of the pool (although I'd argue that's mostly unrelated to the market itself). But going to a less-liquid, less-aggressively traded capital market would likely be a step backwards for everyone. If having the occasional minor clusterf..k like what happened with the FB IPO (which is still tiny compared to the "flash crash" last year) is the cost of the current system... it seems fine to me.

[netcan]

It is a cost/benefit like anything else. Imagine a market where a position must be held for at least one week.

Sure, there is some efficiency in capital allocation lost but how much of a cost is that really? As I understand it its a loss inasmuch as daily stock price fluctuations reflect the actual underlying of a company: not much.

What do you have on the benefit side? For one thing, you won't have the flood of people betting on whether or not Facebook will "pop."