Quality Shareholders

[dcollon]

I thought some of you might find this paper interesting.

 

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3697259

 

 

[SharperDingaan]

The reality is that a shareholder can only either buy, hold, or sell - whether the investment hold period be nanoseconds (HFT), or years. Hence, current price has little to do with value. To move the price up/down, all one need do is use the media - and stampede demand or supply in the desired direction.

 

If you want quality investors, the solution is simple - either DON'T go public, or go private.

One can't trade if there's no liquidity &/or a very high bid/ask spread, instantly eliminating the low-quality shareholder ;) The ancillary benefit is a focus on dividends, and the ongoing ability to pay them - wonderfully, focuses the mind!

 

And if YOU are one of those quality investors? - you would rather not have anything change.

Can't short shares unless somebody lends them. Can't really sell calls either, unless you can get someone to borrow. And really, the more volatility the better - as gains/fees/premium can easily increase a position without any additional investment requirement.

 

Different strokes.

 

SD