by Mr. Perfect » Tue Aug 09, 2011 10:50 pm
Answer is simple, your stock should not be locked up after IPO.
Also, why tax trading at 6 months and not 7 or 5? You are picking a number out of the air, not based on sound reasoning. Take "traders" out of the market, take options out, half of liquidity and capital will disappear, economic collapse.
Az, I have started a number of companies, partnered, raised capital investments, sold out, fell into trading sort of on accident, found it fascinating, learned everything about it. My trading knowledge puts me in the top 1% of the population, maybe tenth of 1%. As far as knowing what it is worth knowing. Lots of people know lots of things that are not worth knowing. Met lots of them, they sell insurance now. But as for businessman, privately held shares, none of this matters. I agree you should have no restriction when IPO (have never taken my own business public), you should go after that restriction rather than destroy the whole economy going after traders. You lock people in for 6 months nobody will risk capital in the market. Very few. Huge economic contraction. All for nothing. IPO effects 1% of the market at any given time. Don't burn down the forest to save one baby chipmunk, please. All the other chipmunks will die.
"Traders" do not cause volatility, uncertainty does, uncertainty of earnings, risk associated with that. Lots of stocks with low volatility, why is that? Why do traders not terrorize those businesses? It is because they are low uncertainy businesses. The root cause is risk, not terrorist traders. High PE multiple puts pressure on share price, not traders. Stock can double in value, one trade from an "investor". Stocks can move 15% on one trade (called "gaps"), move .001% on millions share traded. Which one was an investor, which one a "trader"? Doesn't matter.
Options are the motor oil to the engine of capitalism, keep things liquid and smooth. You should sell puts to buy stocks, and sell calls to sell stocks, make extra money just sitting on the table. People want to buy and sell options, leverage and insurance vehicles, everybody happy. No real problem, other than over-leverage and bad underwriting, but that is not unique to options. Democrat government programs far more harmful to economy than options. Democrats say waste=demand (Keynes). Crazy stuff.
Options are good.
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