<story><title>Mark Cuban:  What Business is Wall Street in?</title><url>http://blogmaverick.com/2011/08/08/what-business-is-wall-street-in-2/</url></story><parent_chain></parent_chain><comment><author>T_S_</author><text>Simple solution. Penny a share transfer tax for all trades. Corresponding amounts on bonds and other instruments. Watch the amazing reduction in volume and volatility. Then watch the return to focus on value trading.&lt;p&gt;Like that idea? Next, open up public companies books. Not in the formal but phony SEC/GAAP way. No, I mean realtime journal entries. I will do the accounting myself. You can too. Link the trading tax to how often the company updates its numbers. Want more liquidity for your stock? Give more information.&lt;p&gt;Still on board? Ok, now if a company releases forecasts, they must release the model they used to generate the forecast. Yes, the code. Doesn&apos;t matter how simple or complex. Bullshit forecasts will be self-evident. Data for better ones will be more available.&lt;p&gt;Now all those things would make finance productive again by putting the focus back on capital allocation and moving it away from trading, speculation and lies. Make regulators focus on enforcing real transparency, since they don&apos;t know how to regulate behavior. This takes away the upside from the regulator/industry revolving door. It would be a great world for analysts and investors.&lt;p&gt;In olden days (1980) all this would have been technically infeasible. Now we have the computing power to handle it.</text></comment>
<story><title>Mark Cuban:  What Business is Wall Street in?</title><url>http://blogmaverick.com/2011/08/08/what-business-is-wall-street-in-2/</url></story><parent_chain></parent_chain><comment><author>dkarl</author><text>&lt;i&gt;It is getting increasingly difficult to just invest in companies you believe in.&lt;/i&gt;&lt;p&gt;This is a key point, and he doesn&apos;t justify it at all.  Are value investors negatively affected by someone making a penny when the value investor makes a $1000 trade?  Or are they positively affected by liquidity?  He is either unaware that it&apos;s a controversy with plenty of history, or he prefers to gloss over it.  He seems bothered by the fact that there&apos;s a lot going on besides simple value investing, as if any other activity &lt;i&gt;must&lt;/i&gt; be detrimental to the operation of the market.  He seems to be implying that the other activities on Wall Street are preventing stock values from reflecting investors&apos; rational estimates of the value of the underlying businesses.  &lt;i&gt;Seems&lt;/i&gt; to be, I can&apos;t be entirely sure.  If that&apos;s his point, he needs to muster some evidence, because plenty of people claim the opposite.&lt;p&gt;&lt;i&gt;Individual investors and the funds that just invest in stocks and bonds are not going to crash the market.&lt;/i&gt;&lt;p&gt;Individual investors are very much among those who panic and sell when the market goes down, or who establish stop-loss orders with their brokers that cause market losses to irrationally cascade.  Plenty of individual investors are eager to turn into gold bugs at the faintest whiff of a downturn.  If amateur investors or stock analysts are better at value investing than &quot;traders&quot;, they should eat the traders&apos; lunch when the market panics. If it&apos;s the other way around, then the traders aren&apos;t the ones crashing the market.</text></comment>