
The Long-Term Stock Exchange Opens for Business - ummonk
https://blog.ltse.com/the-long-term-stock-exchange-opens-for-business-38b13f51e87b
======
eries
Hey everyone, Eric Ries here. Happy to answer questions if you’d like to learn
more about what we are building at LTSE

------
bricemo
Let me try to summarize everyone’s same question:

\- The idea of a stock exchange that allows companies and investors to focus
on 5, 10, 25 year horizons sounds great!

\- However companies on normal stock exchanges now already try to do this, but
it’s hard because of quarterly earnings, pressure for quarterly growth, etc

\- How is LTSE different? Seems like: Companies and investors “promise” to
have a longer term focus via planning

\- seems like that wouldn’t be enough and the same financial pressures would
result in the same focus

\- We were expecting something like: “investors must hold positions for 10
years”, or, “earnings only reported every 2 years”, etc etc. but there’s
nothing like that.

\- So, what is the big idea, the teeth, the new rule, that makes long term
focus enforceable?

~~~
cmroanirgo
I used to be part of the system that built machines that auto traded on
arbitrage opportunities due to millsec/nanosec differences in reported prices
in different exchanges.

Although probably not popular I would suggest that long term stocks needs to
incorporate features that actively block certain trading patterns: limit price
changes, limit buy/ sell frequency, & disallow shorting.

I have been heavily involved in the gamification of the stock market and the
above are used to maximise immediate returns to day traders and auto-trading
machines. By fixing a price for the day, then there is less incentive to
'rush' to get to the price. Also, limit how quickly someone can buy and then
sell a trade, rather than milliseconds (or smaller). I would strongly urge
disallowing the buying of a stock by the same person, if they'd sold in the
previous week. Shorting is never a long-term game and should be banned, as it
never does the company any favours.

But what I see on this LTSE is nothing of what would actually constitute long
term ownership of stocks. What I actually see with this LTSE.com is the
opposite of value for a stock, as it is only driving increased gamification of
the metrics mentioned above.

That is, if I were an automated machine trader, I would add LTSE and their
slow price changes and compare them to NYSE and make zillions.

I don't see how this encourages any kind of long term investment, nor
stability for a stock.

~~~
fluffything
> & disallow shorting.

Why would you completely disallow shorting ?

I'd think that in such a framework, shorting would just need to become a
longer term bet. So one could offer something like 2,5,10 year LEAPs, but
restrict their trading to a window of 1 week per year (e.g. one can trade
derivatives as much as one wants, but only during week X, which is the week
when all derivatives expire, and all derivatives are long term).

Also for options, one would need to always require traders to be covered with
the actual stock.

~~~
michaelt
If traders have to be covered with the actual stock, would that mean they can
only short Foo shares up to the amount they own? Surely that's equivalent to
just selling your holdings?

Or are there people who'll loan out their stocks for 10 years, trusting the
borrower has enough cash not to go bankrupt in 10 years no matter what
happens?

~~~
fluffything
> If traders have to be covered with the actual stock, would that mean they
> can only short Foo shares up to the amount they own? Surely that's
> equivalent to just selling your holdings?

I had selling a call option in mind.

------
specialist
Congratulations.

"We shape our buildings; thereafter they shape us." \-- Winston Churchill

Though I barely understand such things, I'm very excited by your LTSE and
Katsuyama's Investors Exchange (IEX).

Listening to your interviews about LTSE, my takeaway is that your goal is to
allow companies to be judged on their own merits, instead of someone else's.

So one side effect may be to help migrate private equity funded companies back
into the light. Terrific, right?

I hope others see that our markets are designed. They are human artifacts.
They are not natural laws to be accepted as-is. That we can shape and nurture
markets as we see fit. That the rules matter.

You and Katsuyama identified opportunities for improvement and engineered
solutions. You're meta-geeks. Like programmers who make programming languages,
so that others might benefit.

Happy hunting.

~~~
centimeter
> I hope others see that our markets are designed. They are human artifacts.
> They are not natural laws to be accepted as-is.

“Markets” are not the same thing as “the market”. Markets are human artifacts;
the market is an emergent behavior. It’s governed by laws beyond our control
as surely as the behavior of materials are governed by thermodynamics.

If the behavior of your markets fails to match the reality of the market, the
best you can hope for is to only introduce a small amount of inefficiency. Of
course, utopians who ignore the real nature of the market usually find
themselves lethally encumbered by deadweight loss.

> your goal is to allow companies to be judged on their own merits, instead of
> someone else's.

What is this supposed to mean? Why would a company’s subjective evaluation of
themselves be a better basis for market valuation than the evaluation of the
people who actually buy and sell interest in that company?

~~~
samatman
The way you've put this bears more resemblance to religion than anything else.

"Markets" are real things. I can walk to them, or navigate to their website,
or call them up.

You are claiming that there is an invisible, metaphysical "the market", which
exists in the Platonic world of forms, that governs the behavior of these
genuine markets.

This is like reading "The Gods of the Copybook Headings", and founding a
religion which worships and offers sacrifice to those gods!

This "the market" you refer to is an _abstraction_ of the behavior of real
markets. It can give us all sorts of guidance as to what will happen when
various rules are applied, or not, to these real markets; but comparing these
broad heuristic rules to thermodynamics has me suspecting you don't understand
either thermodynamics nor macroeconomics.

Every market has rules. Invariably, you are not allowed to stab a vendor and
take their stuff. Sometimes there are things you can't sell; sometimes only
Dutch auction is allowed, and so on ad infinitum.

This is simply a market with different rules from those governing other stock
markets. We're all free to speculate on the consequences those different rules
will have; perhaps they will summon literal Gods of the Copybook Headings,
which will return upon us with actual terror and slaughter.

The safe bet is that prediction and reality will be divergent. This is
economics, not thermodynamics, after all.

~~~
throwaway_fc
> The way you've put this bears more resemblance to religion than anything
> else.

The connection with religion goes deeper that it seems.

Mission, vision / visionary, iconic (product), (job) creator, charismatic,
angel (investors).

All these words had a purely religious meaning 200 years ago.

This is not just natural evolution of the language. Other fields don't have
this amount of religious words at all.

------
om2
The blog post doesn’t explain what, if anything, is different about how the
market works.

From the name, I expected that it would require holding an investment for a
minimum period. But I see no evidence of that elsewhere on the site. I do see
listing requirements that supposedly require companies to have a long term
focus. But then elsewhere I see that all securities in the S&P 500 and the
RUSSEL 2000 index will be included.

So I’m very confused? What even is this thing? Did I miss a concise
explanation somewhere?

~~~
lappa
IMO, the main difference between LTSE and a traditional stock exchange is the
way votes are allocated to shareholders. Traditionally voting power is
proportional to shares owned. However, on LTSE the amount of time a stock has
been held is also considered.

There is no minimum holding period, but there is an incentive to hold.

A bit of a tangent: Since there is a premium in voting rights (GOOG vs GOOGL),
I'm curious to see how this new voting structure might result in strange
behavior by traders and investors. For example, will people use single stock
futures to hedge while retaining their voting rights? Will special purpose
vehicles for holding shares be created?

~~~
valuearb
< Traditionally voting power is proportional to shares owned. However, on LTSE
the amount of time a stock has been held is also considered.

This seems problematic. The longer you hold your stock the more voting rights
and hence value it accrues. But if you sell the shares all the accrued value
is lost. So it surely leads to proxy voting, where former owners still are
registered as owners of their former shares, but vote them for whoever they
secretly sold the shares to.

~~~
read_if_gay_
I might be naive, but are you not going to get caught doing this? Because if
you're secretly selling enough shares that your voting rights will have an
actual impact, it seems like that'll be a fair amount of money you'd also need
to transfer secretly, which is not that easy.

~~~
valuearb
No, controls would be trivial to evade.

Let’s say I have a billion dollars worth of Tesla stock that I’ve owned for a
decade, giving me twice as much votes as normal. You want to increase your
voting power, and are willing to pay $1.5B for my shares to do so.

We sign a loan agreement. You loan me $1.5B at a high interest rate, secured
by my shares and my agreement to vote them as per your instructions. If you
demand repayment I can pay off the loan in full simply by surrendering my
shares to you, and all interest is forgiven. If I want to repay the loan, I
have to pay the full balance, all interest and a prepayment penalty in cash,
no stock accepted.

You don’t want me to repay the loan so the shares can retain their ownership
premium, and so I can’t without paying a massive penalty + interest. You can
never require me to repay the $1.5B, I can simply surrender the shares, so I
can spend it immediately any way I want.

So we can keep this “loan“ going for decades more, or until you want to sell
these shares. Presumably you will sign a similar “loan” agreement with your
buyer to maintain the voting power the share accumulated.

~~~
r00fus
I was with you until the end - how does transferability function with this
kind of loan arrangement?

~~~
valuearb
On its face it’s clearly harder, just because now you need three parties to
sign a new loan agreement. It could be made much easier if the loan is
assignable under same terms, especially if parts of the loan are assignable
for proportionate parts of the shares.

And if the benefits are significant, I would bet this creates a whole tertiary
layer of brokers, bankers and lawyers enabling these kind of transactions with
standardized loan agreements and clearing houses.

------
yayr
I wonder what the actual business model for the company is and how the
incentives from this will affect the LTSE vision behind "long-term investing".
As far as I have seen on the website the company runs various freemium SaaS
products like captable.io, startuprunway.io and hiringplan.io. They obviously
want or need to monetize on that.

edit links: \- [https://captable.io](https://captable.io) \-
[https://startuprunway.io](https://startuprunway.io) \-
[https://hiringplan.io](https://hiringplan.io) \-
[https://fast409a.io](https://fast409a.io) \-
[https://startupdisclosure.io](https://startupdisclosure.io) \-
[https://notegenie.io](https://notegenie.io)

~~~
sbilstein
I spoke to a recruiter for LTSE a year ago and they were hiring lots of
engineers to compete with Carta.

I was a bit disappointed with the pitch; sure Carta is useful but I had hoped
LTSE was a place to do some really revolutionary stuff. It seems like that
aspect of the company is a ways off and from my limited understanding, it
doesn’t seem like today’s announcement makes it tangibly different than NYSE.

I’m neither a banker nor a major investor so I’m really curious to understand
how they see this as a paradigm shift. For now it looks like a stock exchange
started by someone I really admire but not much else.

~~~
rayshan
Companies built to last are built that way from the start. The culture and
contracts baked into the companies follow them for life. That's why we build
software for ourselves and our fellow founders. I wrote more about this here:
[https://shan.io/writing/ltse-launch-americas-newest-stock-
ex...](https://shan.io/writing/ltse-launch-americas-newest-stock-exchange/)

------
hitpointdrew
Seems really cool, but after being on your site for 10 min I have yet to find
the "meat". Other than a vague reference to "through member broker-dealers".
For me the info I am interested in, and would want to see featured most
prominently, is 1) A list of companies on the exchange and their last closing
price. 2) An option (even if through a third party) to purchase shares of
companies listed on LTSE. This information is no where to be found.

~~~
eries
Today's announcement doesn't pertain to listings, so 1) is a ways off still

You can do 2) through your existing broker, so long as they are a member of
the LTSE, which they likely already are. You can check their membership status
here: [https://brokercheck.finra.org/](https://brokercheck.finra.org/)

~~~
Bedon292
I honestly cannot figure out how to use this site to see if my broker, or any
broker for that matter, is a member of LTSE. Would you be able to provide an
example?

~~~
eries
Sure. Here's Citadel's profile from FINRA:
[https://files.brokercheck.finra.org/firm/firm_116797.pdf](https://files.brokercheck.finra.org/firm/firm_116797.pdf)

Scroll down to page 9, you'll see they are a member of The Long-Term Stock
Exchange

~~~
petr_tik
Citadel securities are famous for their long-term investment horizons.

100 milliseconds is practically an eternity

~~~
Schiendelman
For an android!

------
fastball
I have a question: what exactly is different? Wasn't clear in the blog post.

Do you prevent day-trading or something similar?

~~~
eries
We require companies that list with us to adopt corporate governance that
aligns their behavior and incentives to the long term.

I know that doesn’t sound super sexy but we believe this is a high-leverage
point for reforms

We will have more to say on reforms that relate to reading in the future, but
we don’t limit the ability of “tourists” to trade in and out of stocks as
normal.

~~~
safog
What does that mean concretely? Will earnings reports still be quarterly? I
guess I'm trying to figure out why the exchange has to do anything here.
There's plenty of investors and companies that think long term with BRK and
its investors being the most prominent.

Digging a bit more, on the investor side, there are value investors who look
for solid, if unspectacular businesses at a price point and buy and hold over
long periods of time.

On the company side, there are exceptional founder run businesses like Amazon,
FB etc. that don't care very much what things look like in the short term
(Bezos claims he's willing to be misunderstood for long periods of time for
example).

~~~
adventured
> What does that mean concretely?

I noticed there doesn't appear to be tangible answers to this anywhere
(including in the reply you got to your comment). Curious to pitch a supposed
long-term stock exchange without anything meaningful to lure listings to it
other than vapor statements.

I'd bet it's because they can't set any strict upfront requirements. They
won't be able to get the listings they need if they do it, the interest won't
be there. So most of what they're going to try to do is espouse the mission
goals, hoping over time they can gradually implement those controls.

~~~
kkotak
Agreed. Just like everything else, the ideas hold more power based on who they
are coming from. Eric is a stellar individual with a trail of success behind
him - and I'm not taking anything away from him with this comment, but if I
were to go to a set of worthy investors and corporations pitching this idea -
I'd be laughed out of the room as naive.

~~~
eries
I don't know if this is as true as you think. First of all, I've been laughed
out of a lot of rooms for pitching this idea. Hundreds, by now.

Further, although many VC's are indeed herd animals as you seem to suggest,
there are a few bold ones who genuinely hunt for new and radical ideas and
would be willing to back a first-time founder - if you're willing to do the
work.

~~~
kkotak
Thanks for the response Eric. My point is about the audacity of the idea.
Specifically, to open a new financial market place of the magnitude it would
take to be viable, one would need - 1. significant experience in the space to
understand the nuances, what's working, what's broken, etc. 2. Sizable
investments and talent for operations (scale, uptime, compliance, etc.), 3. A
well thought through G2M strategy (including derivatives, indices, options,
day trading, HFT, etc.), 4. A broker network, 5. A true, unambiguous
differentiator that is viable, measurable, enforceable, and timely.

~~~
eries
I'm not sure I had any of those 5 things when I began this journey, tbh

------
owens99
Congrats to Eric on this.

The thing missing from this article is: What does this actually mean? When
will companies start listing? Who will start listing? How do companies list?
What are you offering? etc.

~~~
canada_dry
Yes, interesting article. Though, if this were a software announcement I'd
label it _vaporware_.

~~~
wombat-man
this article feels like when one person at a bar tells me about their startup
that has like 0 progress.

lmk when this materializes I guess.

------
WalterBright
This short-term-pervades-the-market is based on the idea that the current
stockholders are able to trick future stockholders into buying stocks that
have eaten their seed corn, before those future stockholders realize this.

How can this process of continually tricking the next investor possibly work
out quarter after quarter? Wouldn't the stock market have tanked long ago if
this was, in fact, underlying the bulk of the market valuations?

The reality must be, as soon as investors realize a company is short-term
only, they dump and run from its stock, because they will be unable to trick
someone else into buying it at the high price.

Some years ago, I knew the CEO of a company who said he did the financials
"according to what Wall Street short term investors wanted". The stock
promptly tanked as investors actually do not invest that way, and certainly
don't want to invest in companies that eat their seed corn.

Take a look at the companies with the biggest market caps in the world - who
thinks they are driven by short-term thinking? I don't. The investors
obviously don't. And the rewards of long-term thinking are off the charts.

~~~
pirocks
>How can this process of continually tricking the next investor possibly work
out quarter after quarter?

I imagine that if the next investor was someone like a retirement fund this
could work out pretty well, since they have a steady flow of money being paid
in. I don't know to what extent that actually happens.

~~~
WalterBright
Retirement funds lose their investors if they do poorly.

------
calvinmorrison
I don't understand from the website this bit which is about the "Long-Term
Stakeholder Policy". What was the motivation for adding specific fields to
this policy regarding diversity, the environment, and employee retention
strategies? are these just examples?

\- The company’s impact on the environment and its community \- The company’s
approach to diversity and inclusion \- The company’s approach to investing in
its employees

~~~
eries
We wanted to make it explicit that these issues must be addressed in the
stakeholder policy. Mostly we did this to create clarity for the regulators as
to where such disclosures will live. This language mirrors other SEC-approved
rules, but with stronger disclosure requirements here

It’s not meant to be an exhaustive list

------
MrPowers
Buffett, Bogel, and other famous financial folks signed a doc to overcome
short-termism in 2009 that goes into more technical details:
[https://assets.aspeninstitute.org/content/uploads/files/cont...](https://assets.aspeninstitute.org/content/uploads/files/content/docs/pubs/overcome_short_state0909_0.pdf)

Modern executives have incredible pressure to hit quarterly numbers and the
ones that provide value in the long term are the ones that can effectively
ignore this pressure.

Short term pressure also forces firms to play accounting games like taking big
goodwill impairment losses in a down quarter, so they don't need to perform a
writeoff in subsequent quarters.

~~~
jl2718
This is a good example of an accounting trick that should not be allowed by an
exchange-listed company. It’s simply a trick to make a loss not count against
earnings. It’s not even shown as a liability like a self-loan would. In M&A
situations it’s usually shown as an asset. The point being that you can’t
trust the earnings number and you can’t trust the balance sheet asst value, so
you really don’t know anything about a stock. I’m surprised that no analyst
firm has published a common GAAP-based valuation. Perhaps because it’s
impossible, but that underlies the problem for small investors.

------
dtrailin
Given current 50x multiples and high valuations for unprofitable tech
companies I don't think there is much evidence that that current stock markets
are unable to value long term ventures. As well the extent to which a company
is expected to deliver quarterly results is more defined by their board and
capital structure than anything in inherent to NYSE or the NASDAQ.

------
biznickman
Congrats! Aside from viewing volume, where can I see the individual stocks
listed on the exchange?

Also, as a side note, it would be interesting if you had an LTSE index fund!

~~~
eries
None are listed yet. Give us a little time, it’s only Day One

~~~
silentsea90
Echoing what somebody else said, "open for business" feels a bit disingenuous
from a retail investor perspective as there is no place to trade stocks, no
sign up, no stocks listed etc. A more restricted announcement (read directly
to companies) would probably have been a better idea to gain that critical
mass.

For reference, whenever Uber/Lyft "open for business" in a new city, they
don't just flip the switch to enable the app in an area. They work towards
gaining a critical mass of drivers to ensure reasonable quality service
levels, incentivize drivers to stay online as rides trickle in etc.

Or is this the "Lean Startup" approach to get a feel for the reception of the
idea though I'd imagine that was done before you got started on building the
product :)

Overall, I am very excited for what you're building and will watch out for
more substantive updates! It is super cool that your team is working on
challenging the status quo in an unconventional manner.

~~~
eries
I don't understand this criticism. We are actively trading stocks today:
[https://markets.cboe.com/us/equities/market_share/](https://markets.cboe.com/us/equities/market_share/)

You can call your broker right now and ask them to direct your orders to a
specific exchange, including "L" on the SIP.

~~~
ismail
Eric, you are a smart guy. I think you should pay attention to the signal.

Multiple people have mentioned a similar thing. I have had a similar
experience.

While it may be technically accurate that the “LTSE is open for business”

My expectation and others also seem to have had a similar expectation after
reading the announcement was:

We can now purchase shares in companies that are listed on the LTSE. Having
tried to get more info on companies listed on the LTSE, we are finding none.

“Open for business” is never defined.

It says

“Today, after months of booting up, I am thrilled to report that the Long-Term
Stock Exchange has opened for business with a mission to support companies and
investors who share a long-term vision.”

There are a few potential options:

1\. oversight , without the realisation that people will assume the LTSE has
shares listed on it which can be traded

2\. Deliberately designed to lead people to think the LTSE has shares listed
on it in order to test. Lean startup and all that.

On a other note long range planning and thinking is difficult, due to
discounting and uncertainty. A massive impact can be had if more people could
think Though multiple causal generations down.

~~~
roguecoder
I don't know why you would assume that a stock exchange being "open for
business" meant having a company listed. If you have a company to list, LTSE
is now a place you could take it public. Yesterday that wasn't true.

Maybe it's people used to stock exchanges treating companies as the product,
instead of as their customers? If so, you seem to be demonstrating the problem
LTSE is trying to solve.

------
dfabulich
How would I buy a share of a company on LTSE today? Does any major online
brokerage work with LTSE?

~~~
eries
Yes, the major broker-dealers and market makers are members of the exchange.
You can route orders to LTSE via your existing broker, just call them up and
ask them to do so.

I believe Interactive Brokers, in particular, extends this privilege to all of
their retail customers. But I don't have first-hand knowledge of this, just
what I've heard.

~~~
dfabulich
Do I have to "call up" a broker to do this trade? I've only ever used online
brokerages. Am I just supposed to call Etrade's 1-800 number or something?

EDIT: Wait a minute. No individual stocks are listed yet on LTSE
[https://news.ycombinator.com/item?id=24421925](https://news.ycombinator.com/item?id=24421925)
so what am I supposed to ask them to do?

When I want to buy a share, the first thing the brokerage asks me is the
stock's symbol. Without any listings, what am I supposed to tell them?

~~~
eries
Today's announcement is about our ability to trade all US exchange-listed
securities. It's not about listing our own equities. This is what it means to
be a National Securities Exchange in the US.

So if you want to trade any US exchange-listed symbol, your broker can do that
on LTSE (assuming they are a member)

~~~
dfabulich
So I could use LTSE to buy a share of MSFT? But MSFT hasn't agreed to follow
any of the LTSE's rules. Why would/should anyone buy MSFT on the LTSE?

Or maybe the point is: there's no point in buying shares with LTSE today, even
though you technically can do so, and instead I should wait until there are
individual listings and buy those?

(And even then, I don't need to use LTSE, I can just buy their shares on
NASDAQ with Etrade like I always do…?)

~~~
eries
Correct. There is no need for you to transact on LTSE for the specific use
cases you've outlined in this thread. We are open for business so, for the
first time, you're able to if you want to.

~~~
natcombs
Forgive the stupid question, but what's the continuity plan LTSE shuts down in
a decade. Who does my share of MSFT go to?

~~~
eries
Exchanges don't hold your shares, so once you have them in a custodian account
you can do whatever you want with them, regardless of what exchange you
acquired them from.

------
valuearb
The real solution for better aligning corporate incentives with long term
investing is to reform the public company board structure. The problem is
current public boards are controlled by insiders, both C suite execs and
entrenched board members, which leads to insular self dealing. Every CEO over
time pollutes the board with their cronies to maintain their power base.

The solution is simple, allow shareholders to propose board slates. That guts
the power of insiders to control the company, but the SEC has never had
cajones to make it happen.

------
lordnacho
Suppose LTSE becomes a thing, and they find some companies that they can
certify as Long-Term(TM). What stops those shares from being traded on some
other exchange, eg BATS?

What is it about the venue that makes it special? It seems that once an
investor thinks a company has some desired characteristic, all they'd care
about is where to get the shares as cheaply as possible.

~~~
james412
NMS shares can trade on any exchange, but there is still a primary listing
exchange. They're mainly (AIUI) responsible for publishing data on various
administrative minutia such as the handling of dividends and splits. I imagine
most of LTSE's attraction to companies is enhancing the perception of only
accepting listings from companies with a long-term view

Much like as an investor you'd think twice before purchasing an OTCBB share
today, or perhaps 30 years ago pay more attention to the difference in listing
requirements between Nasdaq and NYSE, I think that's what's intended here

------
eries
PS. we are hiring: [https://jobs.lever.co/ltse](https://jobs.lever.co/ltse)

~~~
Galanwe
> This is an opportunity to join a new stock exchange at a critical time in
> its development as our first IT Engineer

First IT? Wait, how is the exchange running?

~~~
eries
I hadn't thought of parsing the sentence that way. We mean our first hire
dedicated entirely to IT (as opposed to other forms of software engineering)

------
cwkoss
Having a hard time groking what exactly LTSE does differently.

What are the specific features/differences between LTSE and other markets?

Will companies listed on LTSE be listed exclusively there, or also on other
markets?

~~~
eries
I've posted links elsewhere in this thread to the exact points of
differentiation. You can even read the legal filings, if you are so inclined.

We support (and encourage) dual-listing, so that a company can still benefit
from our protections while accessing liquidity at the open/close from a legacy
exchange.

~~~
om2
What protections do you provide for companies?

------
m1117
I read this post and its vagueness gave me no info. Where's the link to the
LTSE? How does it work? What's the plan? Any quantitate metrics?

------
baccredited
Many private companies are staying private for longer, with an average time
from launch to IPO creeping up toward 10 years or more. Most unaccredited
investors are missing all of those substantial early gains.

Does LTSE have any plans to help speed the path to IPO and let more
unaccredited investors participate in early growth and success?

~~~
eries
It is my hope that we will be able to reverse this trend by making the
experience of being a public company dramatically better. It will take time to
see this play out, just as it has taken time for us to get into this mess.

But in the long run, it's important that the broad public be allowed to
participate in growth investments, and I think the public markets could once
again be the best place to enable that to happen. Frankly, I think it's
immoral that at a time in history when we are pushing more and more of the
responsibility for people's retirement onto individual savers, we have also
made it illegal for them to make most growth investments. If we don't correct
this imbalance, I fear the backlash to tech will only worse and intensify.

Tech didn't cause this problem but we will bear the brunt of the backlash if
people feel left behind.

~~~
webmaven
So, do you anticipate startups being able to IPO on LTSE at some point?

------
creeble
There is no need for a long-term stock exchange.

If you want to encourage long-term investing, "all you need to do" is change
investment taxation.

Equities held for less than a minute? 100% tax. A year? 20%, like the US
today. Five or ten years? Zero.

Boom, HFT gone, and a sudden rise in long-term investing.

But the devil's in the details, in this case the length and shape of the
curve.

~~~
mlrtime
This would discourage market makers form entering the market, increasing
spreads and investors would pay more to execute.

------
11thEarlOfMar
The entire trading industry is formed around the public markets. Large
financial firms, both in accounting and investing depend on revenue from the
quarterly reporting. I'd expect a tremendous amount of resistance to moving
companies to LTSE.

Do you expect that any firms will transfer? Or do you expect a new ecosystem
to develop side by side, over time?

~~~
eries
We have indeed seen quite a bit of resistance, as you say. I kind of think of
it as carving the grand canyon with water and gravity. With sufficient time,
determination, and patience, you can make remarkable things happen. We've been
able to win over many former skeptics to become allies over the years.

I can't predict the future. I know there are existing public companies for
whom this would be a great fit. Can they overcome the inertia and bureaucracy
that tends to set in once you go public enough to make a farsighted bet like
this? Or will it be up to the next generation of corporate leaders to act with
boldness? Time will tell.

------
jbhatab
This is one of my top 5 underrated ideas that I'm so excited to see launch.
This could redefine the relationship between investors/founders/operators
which is clearly driven by quarterly financials. Then go listen to how people
like Jeff Bezos think about building strong companies. Clear misalignment. You
have to be so strong as a founder that you can resist the urges of the market
to think long term.

Excited and hopeful that LTSE might make that type of thinking engrained in
all businesses!! Just might take building a stock market to get there :P
(which is an incredible feat)

~~~
ricardobeat
According to this comment
[https://news.ycombinator.com/item?id=24423448](https://news.ycombinator.com/item?id=24423448)
there is nothing they can do about quarterly reporting, so unfortunately the
shift in thinking will have to happen under existing regulations.

My understanding of this is quite limited at the moment but I'm curious to
learn how and why companies would benefit from signing up for the LTSE and
what effect it will have in practice. There are requirements such as a "Long-
term Strategy Policy" but it seems like pretty much a leap of faith / honor
system for the company to upload the principles.

~~~
eries
Each principle requires a corresponding policy enactment / which must be
verifiable and enforceable

------
b20000
where are the VCs that share this vision? when I tried to raise capital on a
long term vision for our hardware startup I got laughed at.

~~~
eries
Tell me about it...

~~~
Applejinx
Try Nick Hanauer.

------
picodguyo
"They described the immense pressure on companies to pursue short-term results
over creating value for future decades and generations."

Where does this pressure come from? The board? Can't you appoint a board that
is long-term friendly? Institutional investors? Wouldn't the same investors
interested in the LTSE also be interested in you on the traditional market if
long-term is part of your DNA? Shareholders? Shareholders agree to all sorts
of craziness if they like your company (see voting structure of Palantir,
Facebook, etc.)

Maybe others can elaborate on what problem is being solved here.

~~~
dcolkitt
I'll give a shareholder's perspective. Management, when left unchecked,
frequently engages in in wasteful empire building and prestige projects. The
most apparent manifestation of this is in mergers and acquisitions. Decades of
evidence shows that the median merger destroys shareholder value for the
acquiring company.

Imposing strong controls on corporate management is one of the most important
thing that shareholders can do. This might take the form of independent
boards, which aren't handpicked by the CEO. Or the removal of poison pills
(which raises the threat of a hostile takeover for underperforming companies).
But most important of all is the existence of transparent, consistent,
regularly evaluated metrics. That means quarterly earnings targets.

Like any job, CEOs need consistent feedback to keep their incentive aligned
with those who employ them (shareholders). Management has shown time and time
again, that when monitoring is weakened, they go off the reservation and
destroy shareholder value. The good thing about earnings is that it's they're
easy-to-measure, hard-to-fake tangible proof of continuing performance. In
contrast stories about "long-term value" or intangible promises of future
rewards are usually BS used to justify extravagant empire building while the
CEO uses the company's balance sheet as his personal piggy bank.

Lest anyone think that evil Wall Street shareholders are hobbling visionary
CEOs, observe the rare cases when management does prove its credibility. Prime
example is Amazon, which time and time again has scarified short-term earnings
for long-term development. And nobody could possibly claim that it's punished
by Wall Street for this. The difference is that unlike 99% of CEOs, Bezos has
conclusively proven his ability and alignment with Amazon shareholders.

~~~
gogopuppygogo
Bezos was an investment banker.

Before he had the track record of long term development (only born from long
term efforts) he knew how to speak Wall Street and had a track record on Wall
Street.

Most CEO’s will never be capitalized like him for long term empire building so
it’s hard to say there couldn’t be more Amazon sized successes out there if
Capital was more accessible for longer term visions.

~~~
jsdavo
Wait, I thought Bezos was a quant, not an investment banker?

~~~
hchz
He worked at bankers trust, but not as a banker, and then at a quant hedge
fund, but not as a quant.

------
kenned3
Amazing to see you here Eric.

Having worked in Equities most my life I love the idea you are putting forward
here. We really need to stopthinking in terms of "next quarter" and structure
our markets for the longer term.

Question for you : What are your thoughts on corporate buybacks on your
exchange?

~~~
eries
I think buybacks have occasional legitimate uses, but there’s a reason that
they were considered basically illegal not that long ago

I think if companies are sincere in their desire to use buybacks only for good
purposes, they should commit to report “EPS net of buybacks”

~~~
dasudasu
They do. The number of shares outstanding is publicly reported. You can
already divide earnings any way you want yourself. To me shares buyback is
just the counterpart to selling shares on the open market to raise capital.
It’s anti-dilutive and can be in the interest of shareholders.

~~~
vmception
Disclaimer: I can take any side of the regulatory pendulum with a straight
face, and that also means pointing out accurate statements with no real
opinion on either.

Buybacks were illegal because it falsely showed demand in the market. False
demand is a key point in modern market manipulation and fraud cases.

Given that reality dissolved 30 years ago, of course we are all familiar with
the arguments "It’s anti-dilutive and can be in the interest of shareholders"

~~~
alasdair_
My understanding is that stock buybacks are generally better than issuing a
dividend for the simple reason that with a buyback, an owner can choose to
sell (and incur a taxable event) or not sell, while with a dividend the
taxable event is forced upon them.

~~~
vmception
A convenient reality as they can also just be used to constrict the supply of
shares on market more and more, which is what they do. How also convenient
that it can result in gains much more amplified than dividends.

Yes, your observation is _also_ true. But lets not pretend companies were
really trying to choose between dividends and buybacks, most don't do
dividends and ultimately never return capital to shareholders, which is the
point of stock: to act as a conduit in sharing earnings.

~~~
alasdair_
> But lets not pretend companies were really trying to choose between
> dividends and buybacks

I’m not pretending. And most companies eventually are designed to return
capital to shareholders - otherwise why would anyone buy them?

------
jaesung
I don't have any questions, I just wanted to mention that I think you're
changing the world more than most people realize.

~~~
eries
Thank you! I don’t mind being misunderstood for long periods of time, that
kind of goes with the territory. But still, it’s nice to get a shot in the arm
every once in a while

~~~
zonethundery
Opening a new exchange is a huge achievement. Congrats on making it over all
of the regulatory (and other) hurdles!

I wish you the best of luck in attracting new listings; it's a fascinating
idea.

------
jovial_cavalier
Are there any incentive systems in place to ensure that companies being traded
on your exchange don't take part in these destructive practices, or is it
simply that they agreed to your policies?

If it's the latter, I don't see why a company would opt to be traded on your
exchange if they get literally nothing in return other than good boy points.

I also don't understand why this is a problem you are tackling at the exchange
level if you aren't changing how the exchange works.

~~~
eries
Yes, there are incentives. But I object to your characterization of doing the
right thing as "good boy points." Acting ethically and treating people right
is its own reward _and also_ has been repeatedly shown to lead to
outperformance.

Our exchange works differently than the legacy players, so I don't really
understand your last point.

~~~
jovial_cavalier
>Acting ethically and treating people right is its own reward _and also_ has
been repeatedly shown to lead to outperformance.

If that's the case, then what does your exchange add? I think we are in
agreement about these principles, but I don't understand how your exchange is
encouraging them.

Better than just encouraging people to agree to these practices is if you
could set up a competitive landscape where they are more directly rewarded
than in the current paradigm. That is primarily how I see an alternative
exchange contributing to this cause.

>Our exchange works differently than the legacy players, so I don't really
understand your last point.

This is the central contention. I don't understand _how_ you are different
from legacy players. What is the actual concrete difference in how you operate
_as an exchange_ that differs from your competitors? Furthermore, how do you
expect that to lead to less short-term rent seeking?

------
dfabulich
It says you’re open for business. What business is now open? Can I buy a share
of a company on LTSE today? Can I list a company on LTSE? (I can’t find a way
to do either of those things on your website.)

~~~
eries
Yes, you can do both. Trades happen through stock brokers as with any other
exchange. You can track the exchange’s daily trading volume here:
[https://markets.cboe.com/us/equities/market_share/](https://markets.cboe.com/us/equities/market_share/)

The listing application (and attendant legal docs) is here:
[https://longtermstockexchange.com/listings/documents/](https://longtermstockexchange.com/listings/documents/)

~~~
powvans
Is there a publicly available list of companies that are listed on the LTSE?

~~~
eries
Not yet

~~~
IshKebab
Can you say how many it is roughly? Like, are there 10? 100?

------
x87678r
The only way I think investors could invest more in companies with a long term
view is better margining so you could borrow money to invest in companies
without getting margin called. Eg you can buy a house with 5% down, but you
can't do this with stocks because normal volatility means you'll likely be
wiped out.

~~~
eru
You can buy (and sell) options to limit the impact of that volatility.

But I'm not sure why you would want to encourage margining when you are
against volatility? The capital for the margin loan has to come from somewhere
too.

So instead of person A putting up 5$ and borrowing 95$ to own 100$ in stock,
and person B lending those 95$; it might be better for volatility for person A
to own 5$ in stock and B to own 95$ in stock?

I am not sure.

For full disclosure: my investment strategy involves margining.

(Btw, I do think that 5% equity on houses is bad. It's mostly a function of
land prices going up so much.)

------
leptoniscool
It can be argued that long-term thinking is already part of the current market
structure, for example take Amazon or Tesla which trades at extraordinary PE
ratios. In essence investors are betting in the far future these companies
will make money. How does the long term stock exchange differ?

~~~
rayshan
How would companies live up to the long-term expectations? Who's holding them
accountable? What's the investor's discovery mechanism for more long-term
oriented companies? These are some of the things we think about.

------
TheMagicHorsey
If you have a long term view on business, you can actually just use the
existing stock exchanges. The stock exchanges aren't the reason for short term
thinking ... the incentives of executives and investors are the reason for
that.

There's plenty of companies that take the long view and whose investors have
been rewarded for it ... Amazon, Netflix, Tesla, etc. ... its not like the
existing stock exchanges and investors have stopped them from running a loss
and investing in the long term.

I feel this is a solution that isn't aimed at the right part of the "stack".
Reform is needed in the way the professional management of large public funds
and pension funds are evaluated and compensated ... but you won't solve that
with a new stock exchange.

------
maximilianroos
I can understand the effort to weigh firm's incentives towards longer-term
incentives, and I can see how the suggested changes to companies' structure
would achieve that.

But why do those changes need to be coupled to the exchange a company assigns
as its primary listing venue?

~~~
eries
Companies can dual-list so LTSE does not need to be the primary venue

Stock exchanges have the obligation to set standards for the behavior of
managers and investors. It’s this dual-stakeholder role that uniquely allows
our reforms to take hold.

Believe me, I looked long and hard for an easier way to get this done

------
dangerface
> adopt corporate governance that aligns their behavior and incentives to the
> long term.

What does this mean? What quantitive measures are you using to qualify long
term incentives and behaviours?

No offence but you don't seem to have an answer to this question.

For example is RDSA long term? They have been around for ever and people will
need cars and oils for the forseable future at least 10 years is this long
term? What happens when the oil runs out / global warming / move to electric
cars is it still long term and how long will that term end?

I need qualitative facts and figures before investing.

I buy stocks that provide value to people in a way thats scaleable and I have
fixed time periods for when I expect investments to return like 5 years or 10
years.

When some one can't talk about the value their service provides and use loose
terms like "long term" how long is long? This is an easy pass for me.

~~~
eries
Leaving aside some of your odd claims, I’m happy to answer the question. Our
definitions and standards are laid out in excruciating detail in our hundreds
of pages of legal filings. Here’s a good place to start if you are interested:
[https://www.sec.gov/rules/sro/ltse/2019/34-86327.pdf](https://www.sec.gov/rules/sro/ltse/2019/34-86327.pdf)

Also this may be of some interest:

[https://longtermstockexchange.com/static/principals_for_lt_s...](https://longtermstockexchange.com/static/principals_for_lt_success_white_paper-52e153e1e0be49bd178f74475f274ef0.pdf)

~~~
rytill
You don’t have any key ideas that you can express without linking to “hundreds
of pages of legal filings”? His claims are not odd at all, you really haven’t
put any effort into distilling the incentive design.

It’s not impossible to express complex incentive design or push readers in the
right direction to understand this. What is the essence of what is
quantitatively or contractually different about LTSE?

~~~
terminalcommand
The first link seems to be a 14-page memo and the second link a 28-page
marketing document.

As someone who writes these docs for a living, don't be afraid to read the
legal stuff. It's just text.

~~~
rytill
I’m more flummoxed by the suggestion that expressing the basic idea concretely
would be too hard than I am scared of reading a legal document.

------
BiteCode_dev
Genuine question, what good does the ability to buy and sell stock on the
short term do for humanity ? Does it have any specific vertue appart from
allowing one to make make money by betting correctly ? Why are not all sales
required to be long term ?

~~~
LatteLazy
It prevents capital being mis-allocated.

It turns out that is one of the most important things to do in modern, capital
intensive, economies.

It also means people can invest for shorter periods and that means more
capital is available for investment. This has a double bonus where it reduces
the risk of investments again making more capital available...

~~~
BiteCode_dev
I don't have the background to understand your answer, can you make it simpler
with some examples ?

~~~
LatteLazy
No worries, it's all quite counterintuitive :)

Imagine if you're a would be investor. You're money is available now to
invest. So you want the market to be open to let you buy. Otherwise that cash
is just sat there waiting. Similarly, you want to invest all your money. But
if you know you won't be able to get it back for X period of time then you
can't can you? You might not even know how long you can invest for: I might
reasonable expect not to need some cash till Christmas time but if I lose my
job tomorrow I want it now please!

So a market where you can buy and sell rapidly makes you more able and more
likely to invest. That's good for you as you can use spare cash productively
and make a profit while still being safe if you suddenly have a change in
circumstances. It's also it's good for the company you're investing in as they
can raise capital quickly and there is more capital available. And all of this
means more growth and lower costs and that means more tax money for social
services and more jobs for other workers etc.

The analysis for the people receiving the investment is similar but a bit more
complex because the company doesn't just get investment, it also get's
information: a rising share price tells you you should expand, high prices in
general indicate a great time to start new businesses, a competitor whose
share price falls while your one rises has issues and might be open to a
merger\takeover etc.

------
sfard
I read this article and skimmed the original and I'm still not sure what the
exact details of this exchange are. No robo/quant investing? Minimum hold
periods? No requirements for quarterly earnings? No penny stocks?

~~~
Maximus9000
Me too. According to the wiki page:

> Operating principles: In an earlier SEC filing, LTSE said that its corporate
> governance rules might include: increased voting rights for shareholders who
> hold company stock for long periods of time, restrictions on offering short-
> term incentives to executives, disclosure of impact of any stock buybacks,
> and requiring companies to have a board-level long-term product and strategy
> committee.

[https://en.wikipedia.org/wiki/Long-
Term_Stock_Exchange](https://en.wikipedia.org/wiki/Long-Term_Stock_Exchange)

~~~
imagin8or
So you make a fund which holds the stock of the listed company long-term, and
trade the fund as normal... this doesn't seem robust yet.

~~~
liminvorous
This would add a level of indirection to stockholders trying to influence the
company though, right? You have to make the fund managers put pressure on the
company to give you short term gains, rather than pressuring the company
directly.

------
liamcardenas
Why not just create a template for corporate bylaws that you can certify, like
a B-Corp? An LT-Corp, if you will.

If you aren’t implementing any exchange-level mechanisms, why does this need
to be an exchange at all?

------
pdq
I’m still trying to understand the rationale. They should create a comparison
against the current public markets to highlight the differences.

Based on the “long term”, I’m guessing the core concept is no quarterly
reporting, so companies can focus on long term initiatives.

However, how do they explain Amazon, who reinvested what would be their
profits for over a decade, to continue expanding their business and build the
massive Walmart juggernaut? All Bezos had to do was describe the strategy to
the market, expand quarterly sales, and many investors were patient over the
years.

~~~
aesh2Xa1
Amazon is a great counter example and I don't have an argument that says
Amazon does focus on short term at all, and certainly not to its detriment.

However, an exception to the rule is not the rule.

------
booleandilemma
_The objective was to create a public market designed for trading the stocks
of companies organized to sustain long-term thinking_

How are they defining long-term thinking? Is Walmart thinking long-term? Is
Uber?

------
crazygringo
With all respect to Eric, I strongly believe the concept of forcing "long-term
investment" is ultimately a scam.

At the end of the day, it's fundamentally a blank check for management to
misbehave -- to misspend money, pursue pet projects rather than real business
goals, and have nobody to tell them no.

There is _nothing_ inherently short-term about the stock market -- this is a
myth that keeps getting repeated but has zero substance. Short-term changes in
supply and demand add changes to prices, but it's not like anything's 10x off
of the value a company is expected to produce -- the net present value of
future cash flows.

But if you prevent people from selling, then you're preventing the market from
holding a company accountable when its management messes up.

~~~
mcny
> But if you prevent people from selling, then you're preventing the market
> from holding a company accountable when its management messes up.

Is it even possible to hold management accountable for anything at all?
Personally, I think executive compensation is the real culprit.

I've tried to think of ways to put a cap on compensation but I can't think of
any way especially since the management of one company is on the board of
another and they are all in it together. Also something I didn't know until
recently: board members get paid! How is that not the dumbest thing in the
world, I will never know... Personally, I think board members in public
companies should get ZERO compensation, no travel allowance, no perks. They
own stock, don't they? but I digress.

Is there a way to cap executive compensation to a multiplier of the lowest
salary paid by the company? like 10x or 50x something? Like if the lowest pay
is USD 15 per hour or USD 15 * 2000 = USD 30k then the highest executive
compensation (including stock grants, bonuses etc) may not exceed USD 30k * 50
= USD 1.5M which isn't too bad.

Is it possible to codify something like this?

~~~
crazygringo
> _Is it even possible to hold management accountable for anything at all?_

Of course, it's the way things work now. And it has nothing to do with
compensation.

Employees are held accountable by management, and are fired when
underperforming.

Management is held accountable by the board -- and is similarly fired when
underperforming. CEO's are let go all the time.

And the board is held accountable to shareholders -- as owners change or
demand new policies, board composition changes accordingly.

Of course if the CEO/founder owns more than 50% of voting shares then the
board is more advisory than anything else, but that's the exception -- and
it's simply what you get from being the _owner_.

~~~
projektfu
That’s what it says on paper but there is a lot written about management’s
capture of the levers of control. They sit on the boards, set each others
salaries, and recommend each other for their boards. Shares are automatically
voted the way the board chooses unless specifically voted the other way.
Institutional investors typically have a hands-off attitude toward corporate
governance issues leaving activists as the only ones who can hold management’s
feet to the fire.

------
al3xandre
Shouldn’t this be an index fund with conditions to be included rather than a
stock exchange ?

~~~
eries
Probably. I'd love it if someone would build this and get companies and
investors to take it seriously.

------
mikorym
> The objective was to create a public market designed for trading the stocks
> of companies organized to sustain long-term thinking.

I'm sorry, but this doesn't seem to be clear at all to me.

Take the subset of investors that don't trade daily, or monthly, or, even
yearly. There you have your long-term thinkers. And it's a large subset, make
no mistake.

Also, LTSE? That's suspiciously close to LSE. I'm not being a detractor here,
just asking the obvious.

------
superqd
Hmmm, a bit disappointed after reading their blog and site. I expected that
they'd integrated some clever rules around stock trading itself in order to
force, or encourage, long term thinking. I expected something along the lines
of, "no shorting allowed", "stocks must be held a minimum of 6 months", etc.
There was nothing like that, all they have is the rule, "come on guys, think
long term".

I fail to see how this will have any meaningful effect on "long term vision",
if they still allow your stock price to be dumped at the first sign of
trouble, or allow people to bet against your company when some irrelevant bad
news hits, or no one else sees value when you decide to deepen your spend on
R&D for some long term plan. If people freak out, or think they can profit off
of your lack of current obvious value, the you are still going to have short
term fluctuations that you will feel pressured to address.

The problem with short term thinking isn't from companies or company
leadership, they are reacting to the natural short term fluctuations in their
value because of the short term thinking of investors. Shareholders are not
gonna understand your vision every time you decide to engage in a long term
strategic shift in priorities, so they will react when they find out, and that
reaction can swiftly damage a company's value. If shareholders can still trade
over short-terms, then you will still have large scale short-term fluctuations
that CEOs will be forced to address, as more and more potential buyers will be
influenced by the low price of a stock caused by other skittish short-term
thinking investors.

The problem is with investors in stocks, not with the companies unwillingness
to think long term. To make such an exchange work, you have to have clever
trading rules in place to force longer term thinking.

~~~
cactus2093
Why is shorting not consistent with long-term thinking? You can think a
company or industry will decline over a long-term horizon, just as much as you
can think it will grow. It seems like the symmetry of being able to be either
short or long on a company is a useful part of the market signal.

I'm also not sure "hold for 6 months" is particularly useful. A lot of people
are already investing on that timeline today and it hasn't solved the problem.
Also, there are enough investors on aggregate that there would still be a lot
of buy/sell activity every day even with that model.

Something that might be kind of interesting is if there were a short trading
window every ~5 years or something. Then nobody is trading at all for years,
the company can focus completely on the long-term vision and only have to
check in and worry about the public perception of the work for a short period
of time every few years.

~~~
superqd
Apologies, shorting-bans isn't necessarily a long-term view rule, just an
example of something they could do around constraints on trading, not
necessarily something they should do, just I expected some kind of trading
rules to fix the real problem, which in my opinion is investor pressure, not
management short-sightedness.

The rules I suggested aren't necessarily good rules, just random examples.
That is, to me the most powerful driver for short term thinking isn't
managerial in nature, it's investor in nature. That is, it's the short term
fluctuations in market value as investor reactions to events or goals that
have _nothing_ to do with the company's bottom line or long term goals, etc.
But if essentially random forces are affecting the value of your company,
there will exist pressure on management to respond to that pressure. So to me
the real fix is some set of rules constraining _investor_ behavior with
regards to how the stock is traded, not some nebulous honor-code among CEOs. I
am not sure what the rules should be, I just picked random rules out of my
butt. But I think there should be some trading constraints: if you truly want
to incentivize long term vision, you _have_ to remove the short term
pressures.

Like your suggestion for a trading window every 5 years. I have no idea how
well that would work, but it seems reasonable, and is the sort of thing I
expected for the site, but they seem not to have anything like that in mind.
Which to me means that have entirely missed the mark.

------
asaph
How do I create an LTSE account and start investing? I went to
[https://ltse.com/](https://ltse.com/), clicked on the menu and selected
"Exchange". But I only see marketing material.

Update: I found the Sign In/Sign Up URL:
[https://account.ltse.com/](https://account.ltse.com/)

~~~
spelunker
You'll probably need to go through a broker - you don't buy directly from the
other exchanges like NASDAQ either. If/when any brokers are on board I'm sure
LTSE will be sharing that information.

------
xivzgrev
I’m not sure how this works practically. Let’s say Apple wants to do this, and
they list. Do they issue new shares of stock, and that dilutes their other
shares? How is the price determined on this exchange? If there are no
restrictions on trading, and Execs get stock on LTSE, Wouldnt market reactions
to quarterly reports still move price around, incentivizing short term
results?

------
nartz
Just an idea - put a link to longtermstockexchange.com into your blog post,
preferably at the top, with how people can use or buy into it

------
itsoktocry
This seems like a wonderful idea that the world needs. But until I can see a
list of companies that are "accepted", it's hard to know if it's all just lip
service. There are a few companies in the tech sphere I can think of off the
top of my head that many consider "long term thinkers" that others would
consider nothing of the sort.

~~~
eries
I'm as curious as you are to see what happens next...

------
tempsy
The irony of launching now is that the Federal Reserve has created an
environment with zero rates and endless cash that has made speculative stocks
much more attractive in the traditional public markets. The stock market has
become very forgiving if you can show top line growth regardless of whether
you're profitable or not.

------
xorcist
Want to invest in stocks long term? Buy some stock in an unlisted company.
Then you are stuck with them whether you like it or not.

Above only partly in jest. Modern crowdfunding-style stock platforms offers
this to anybody, and while most startups fail, there are exceptions. The long
term commitment required is a different experience.

------
daniel-levin
Hi Eric, presumably the companies will trade on a limit order book, like other
exchanges. This mechanism of price formation allows rapid price movements up
or down. What’s to stop the speculators or retail investor hordes from piling
into a stock and driving its price up or down? Are there holding period rules?

~~~
eries
No, we do not restrict liquidity in any way. We simply believe that companies
should be able to engage with "speculators" as you call them differently from
long-term investors. Ultimately volatility isn't a problem in itself - it's
the effect it has on corporate decision-making that matters.

------
mguerville
I assume companies will still need to be "priced" and then supply/demand will
affect prices, do you intend to have any unique mechanisms to reduce
volatility and short termism by investors or is the idea to be hands off and
control the long term focus in "softer" ways?

~~~
eries
Yes we do, but there’s not really a good way to summarize our plans here.
Suffice to say we are keenly aware of the need to reduce the aspect of
volatility that is driven by speculators

------
libraryatnight
This feels... not open. Click around the site, can't find anything useful just
manifestos and principles. I really hate when startups do this. You're not
"open for business" you're open to being in business. If you tell me you've
started an exchange, you're open when there's listings and people can trade.

~~~
eries
Good point:
[https://markets.cboe.com/us/equities/market_share/](https://markets.cboe.com/us/equities/market_share/)

~~~
newbie789
I am kind of confused. Does this site have a list of the actual listings?
Maybe I'm not navigating this cboe site correctly but that just looks like
some numbers.

Edit: For example if I wanted to invest in a business through LTSE today, is
cboe how I would do so? What would my order flow look like?

~~~
bmcahren
I think you and I would need to lean on a Robinhood to do that. You can't walk
up to NASDAQ / NYSE and perform a trade direct you need a broker.

~~~
eries
correct

to find out if your preferred broker or market maker is a member of LTSE, you
can ask FINRA:
[https://brokercheck.finra.org/](https://brokercheck.finra.org/)

~~~
newbie789
I do not have a preferred broker, and I have no idea how to find LTSE on
Robinhood. I'm sorry if this is a stupid question, but how would an average
person find out what companies are listed on your exchange?

~~~
eries
No companies are listed on our exchange - yet

~~~
vermilingua
Then how have $117m passed through your exchange? If no companies are listed
on the LTSE, how are stocks being traded on the LTSE?

~~~
newbie789
I would also like to know about this.

Edit: Also, he didn't quite answer my question. I asked _how_ one would find
out what companies are listed, not for a list of what's currently up.

I might assume that they'll eventually be on their website but I've now asked
twice and gotten answers about "preferred brokers" and "market makers" (I
honestly don't know what that is) and another saying that this stock exchange
has no stock to exchange. Again, I am not savvy in this area but it seems
reasonable that "how would I view what's available?" wouldn't be to difficult
of a question. If the answer is "those listings aren't 'For you' as a non-
professional investor" then I'd be happy being informed.

------
mcculley
How is "long term" defined? The website talks about decades but does not make
that clear.

Isn't every investment ultimately measured against a 30 year U.S. Treasury
bond? Will the LTSE incentivize longer term investments?

------
davedx
Is Warren Buffet involved, I wonder? I’m reading “The Intelligent Investor” at
the moment, and it seems to me the principles of defensive investing would
align closely with this new exchange.

~~~
person_of_color
Is this book outdated?

------
spurdoman77
Not any technical details. Doesnt make sense. Short time speculators are not
an enemy for long time investors. Also, doesnt make sense to enforce long-term
view on exchange level.

------
zbruhnke
So excited to see this vision come together Eric. I honestly hope one day
we're taking HMBradley public on the LTSE. I have never felt more aligned with
a mission or a vision, Systematically allowing companies to take a long term
view without being punished is what the market needs.

Or put another way ... Adam Smith > Milton Friedman

I cannot wait to see where this goes and the mechanics LTSE puts in place to
help reward long term thinking and long term holders

~~~
itsoktocry
> _Systematically allowing companies to take a long term view without being
> punished is what the market needs._

Why is the default that companies are "punished" for long-term thinking?

I'd bet that there are far more cases of long-term investors "punished" in the
public markets by short-term thinking executives than vice versa.

~~~
zbruhnke
The simplest answer to this is regularly tying executive compensation to short
term stock performance ... it leads to more Jack Welch's and less Jeff Bezos'
... Ballmer is another prominent example, Microsoft all but died under him
while his key metric was stock price, that's not a win in my book

------
minimax
Why did you feel the need to support trading of non-LTSE listed names on the
LTSE? Are there novel order types or other trading mechanics coming down the
pipe?

~~~
eries
Just the opposite, we adopted a set of rules that we call the Very Simple
Market (tm) (yes really). We have reduced the types of orders and removed all
hidden liquidity. This isn't the best trading venue for all kinds of traders,
but we do believe it is superior for certain investors who have a long-term
orientation.

------
alpineidyll3
The density of unsubstantiated platitudes in the marketing for this is high
even for silicon valley. There's a good evolutionary reason human beings focus
on short term thinking. We have no demonstrable ability to forecast into the
distant future!

Corporate governance is eff'd, and does promote short-term shenanigans, but
technology that enables shareholder governance is the solution. Not just
avoiding the price discovery process.

~~~
gkilmain
> We have no demonstrable ability to forecast into the distant future!

Well I woke up this morning and got myself a beer!

------
Invictus0
I want to support this but man is this a botched launch. If your blogpost is
so low on details that you have to spend hours answering the same questions
over and over in the comments, then maybe you should write a better blog post.
It feels like I've just visited a "we are under construction" website; I still
have no idea what this is or what it does or what I'm supposed to do.

------
someelephant
If you want long term thinking, pay packages for executives should take that
into account. This can be done regardless of exchange.

~~~
eries
Agreed. our standards require this

------
mail2vks
There were a few transactions which got completed today. Who is buying and
What are they buying ?

Source :
[https://markets.cboe.com/us/equities/market_statistics/venue...](https://markets.cboe.com/us/equities/market_statistics/venue/longtermstockexchange/all_market/)

------
BigPictures
Like many people here, I’ve been wondering for a long time how they are
planning on keeping companies focussed on the long term. Here is a summary
that is shorter than the SEC filings.

[https://longtermstockexchange.com/listings](https://longtermstockexchange.com/listings)

------
helan
How can you enforce long term holding without explicitly banning shareholders
from selling within an x month period of purchase date? I think it should be a
law that you have to wait like 6 months before you can sell a stock... that
would eliminate ALL traders and craziness in the markets.

------
singwhenurdown
I haven't read every comment here but is this a direct repeal to the common
business logic: "do what increases the shareholder's profits"?. i.e. moving
business focus away from pure profit and onto values that benefit the greater
good (environmentalism, diversity, etc.)

------
natcombs
Congrats Eric! I've been excited about this since your original announcement.

I'm hoping that you'll offer an index fund to make it for passive investors
(and dollar cost averaging) to put more money in this exchange, with less
effort, and push the wall street incentives toward longer term.

~~~
eries
good idea

------
coderintherye
Confused? I'd highly suggest listening to the talk by Eric on this LTSE:
[https://www.youtube.com/watch?v=BvaAYpP691Y](https://www.youtube.com/watch?v=BvaAYpP691Y)

And congrats Eric on getting to this point, I know it's been a long road!

~~~
eries
Thank you!

------
peterthehacker
Congrats! I agree that this is a very important problem to solve. Can you
elaborate on some of the specifics of how LTSE will incentive investors to
think long-term?

I’m imagining some strict trading frequency limits. Like an inventor can only
trade a specific stock once a year. Do I have the right idea?

~~~
eries
No, what you are describing is not currently legal in the US. We have to allow
the stocks listed on LTSE to trade freely across the entire "National Market
System" which includes dark pools and incumbent legacy exchanges.

So in order to solve this problem we have to start with corporate governance.
Remember, though, that shares of stock are not actually commodities. They are
contracts and the rights and responsibilities of stockholding emanate from the
corporate charter. So as we are able to encode protections and requirements
there, they will follow the stock wherever it trades.

Through this mechanism, much reform is possible both today and in the future.

------
hevelvarik
Great, creating an equity exchange is a heavy endeavor and I’ve seen no more
than a couple of medium posts which speak only to the problem but nothing
towards your solution. I’m definitely missing something; where’s the beef? Is
there something of your solution that we can read?

~~~
eries
Sure. All of the details are available in public filings and on our website.
You might start here:
[https://longtermstockexchange.com/listings](https://longtermstockexchange.com/listings)

or here:
[https://longtermstockexchange.com/static/principals_for_lt_s...](https://longtermstockexchange.com/static/principals_for_lt_success_white_paper-52e153e1e0be49bd178f74475f274ef0.pdf)

or here:
[https://www.sec.gov/rules/sro/ltse/2019/34-86327.pdf](https://www.sec.gov/rules/sro/ltse/2019/34-86327.pdf)

------
an_opabinia
It's pretty awesome.

Which was harder - building a stock exchange, or getting someone to read a
whole book?

With the benefit of hindsight, which of the following would you say is the
biggest predictor of growth in equities prices: everything else, greater
buying, less selling, brand, liquidity, or previous prices?

~~~
eries
What makes you think I ever did the latter ;)

In all seriousness, there’s no comparison. A regulated national securities
exchange is one of the harder kinds of startups you can attempt.

I’m pretty sure that over the long run equity prices are a mirror of the
fundamental value creation that companies do by serving customers. The problem
is that this can become distorted “longer than you can stay liquid” as the old
saying goes

------
RivieraKid
The assumed problem is that investors of publicly traded companies pressure
management to make suboptimal decisions, because they overfocus on short-term
performance instead of maximizing the present value of all future cash-flows.

Looking at TSLA, AMZN, FB... I'm skeptical about this premise.

------
hammock
@eries Isn't this a raw deal for executives and potential executives of listed
companies? It introduces new corporate governance rules (no short-term
incentives, buybacks, etc) without alleviating the existing regulatory burden
of quarterly filings, GAAP, etc.

~~~
eries
if a company's executives feel like gaining outperformance by doing extra work
isn't a good deal, maybe don't invest in that company? I'm not an expert, but
I do play one on TV sometimes

~~~
hammock
Fixed the typos. Yeah that's kind of my point. You are going to have less
interest from investors - but not only that you will have less interest from
boards or executives. What's the advantage of being listed on the LTSE, if all
I get are more rules? It's a neat option for investors, but there's two sides
to every market. What does it offer that a long-term-conscious board couldn't
implement themselves?

I can't say "I'm starting a food truck which will sell popsicles that don't
melt even in the face of great heat. Sure the suppliers have to put in a
little extra work to make sure they don't melt, but you as a buyer will
benefit" \- that doesn't really work unless there is a path for those
popsicles to be created and offered for sale in a way that makes sense for the
supplier.

------
mastazi
Non-Medium article about the same topic: [https://ltse.com/articles/the-long-
term-stock-exchange-goes-...](https://ltse.com/articles/the-long-term-stock-
exchange-goes-live)

------
vardan_k
My understanding is that the market cap of a company listed at LTSE will be
far less than of the same company listed at NYSE or NASDAQ since there will
not be a as much interest by both many institutional and retail investors. Is
my understanding correct?

~~~
eries
Definitely not

~~~
maxk42
You can't just say "Definitely not" and leave it at that. You have to explain
why or you come off as a huckster.

~~~
eries
I'm happy to clarify further. There is nothing in the summary above that is
accurate so I wasn't sure what else to say. Please feel free to ask followup
questions, I'll do my best to get to them today

------
GlennS
I think something like this might be more useful outside the USA.

Publicly traded companies in the USA already re-invest quite a large chunk of
their profits for future growth, where companies in other countries would tend
to pay out larger dividends.

------
jyz
@eries any plans/timeline to list LTSE on LTSE? Also any additional thoughts
on the index fund proposal described by a few here: would you want to include
existing public companies or only completely brand new LTSE listed companies?

Thanks

------
GuB-42
I'm wondering if "stability warrants" could help promoting long term goals
over runaway speculation.

This is a financial product available on the CAC40 index which pays off if the
index value stays within a certain range.

~~~
eries
Curious to learn more about how this might work

------
qwertox
Wow, it sure was pretty hard to find the street address, and this was in a
context which makes it look like you were legally forced to publish it. Don't
you want people to know where you're located at?

------
JosephObell
What criteria is necessary for companies to list on the exchange? Can we have
you on our podcast for 10 minutes to talk about the exchange? We are called
Moontower Business based in Austin, Texas

------
mabbo
Do you think you'll see something like "ethical index funds" that index your
exchange, and sell themselves to customers based on the rules of your
exchange?

And if so, when can I buy in?

~~~
eries
Yes, I hope so. I think if and when that happens, it'll be pretty big news. I
don't think you'll miss it.

(But I guess you could subscribe to our newsletter in the meantime...
[https://ltse.com](https://ltse.com) at the bottom of the page)

------
lr
Just throwing this out there... Why not a simple rule to require all shares to
be held for at least 24 hours before selling? It would certainly change the
game in every way imaginable.

~~~
codeulike
It would but powerful vested interests would probably fight it tooth and nail.
See
[https://en.wikipedia.org/wiki/Tobin_tax](https://en.wikipedia.org/wiki/Tobin_tax)

~~~
eru
Not just powerful vested interests. Anyone who knows anything about economics
knows that transaction taxes are bad for efficiency etc.

Tax wealth for all I care. But don't tax transactions.

(Btw taxing transactions would actually make financial speculation more
profitable. Because bid/ask spreads would become wider and prices more
volatile.)

------
xwdv
Will the long term stock exchange feature any kind of derivatives?

------
JosephObell
What criteria is necessary for companies to be listed? Can we have you on our
podcast for 10 minutes to talk about your exchange? We are a business podcast
in Austin, Texas.

------
jimbob45
Small brain: Link your site, get DDOS’d

Big brain: Link your blog explaining your site, main site is unaffected by
DDOS

Galaxy brain: Link your blog explaining your site hosted by a 3rd party. No
DDOS.

Nice work, everyone.

------
Animats
Oh, it's mostly a statement of principles to which a company can sign up. More
like a "public benefit corporation". Are these binding? How are they enforced?

I was expecting some kind of exchange designed for lower volatility. There
have been exchanges proposed where prices only change once a minute, or
something like that, to stop high frequency trading. But this isn't one of
them. Warren Buffett has proposed that any capital gain over a period less
than a year be taxed at 100%, to force a buy and hold strategy. Not seeing any
of that here.

~~~
JumpCrisscross
> _Warren Buffett has proposed that any capital gain over a period less than a
> year be taxed at 100%, to force a buy and hold strategy_

Well yes, anyone with ample liquidity would love this. Anyone needing short-
term liquidity would be price indifferent between their acquisition price and
the market price. Liquidity providers would make bank.

------
heimatau
I'm wondering a few things:

1\. Can we do a direct stock listing?

2\. How much equity needs to be offered?

3\. Is there a minimum valuation that needs to be met to be listed?

4\. What are the fees to be listed?

------
helan
Are you explicitly banning traders from trading? For example requiring you
have to wait x months from purchase date before you can sell your shares.

~~~
smabie
That's a really bad idea. If that was a rule, there would be no liquidity at
all as no market maker would touch it. Also shorting would become too risky.

------
nend
Are any companies currently applying to be listed?

~~~
eries
The listings process is highly regulated and any conversations of this type
would be confidential, so I can’t answer this one

------
yellowbanana
What are the benefits for a company to list here?

What are the current examples of company that exists now that fit that ideal
long-term vision?

~~~
technocratius
I expect they'll find capital from investors/shareholders there that will be
less activistic in periods of short-lasting economic underperformance

~~~
yellowbanana
Are they going to limit the volum of the transactions, or it's trusting the
investors.

It would be better if they gave more details on it.

------
elamje
Eric, what are some companies you’d be happy to list on your exchange? Both
IPO and older companies already listed elsewhere.

------
SketchySeaBeast
So how do we monetize this? I see the idea is the long term goal of
sustainability, but how does one get their money out at the end? I wouldn't
have these expectations for most of these initiatives, except for the use of
"stock exchange", so I expect there to be some reason to exchange stock. Call
it "the green list" or something if there's no money to be had, and that's
totally fine, but the name doesn't match the goal.

------
CapriciousCptl
Can/will LTSE restrict options trading?

~~~
d--b
If they don't do options themselves, nothing prevents another exchange to list
options on prices published by the ltse. So if the exchange is succesful, it's
likely they will list options there too.

------
haeli05
What are the listing fees and procedures? Are you similarly regulated to NYSE?
Can smaller startups and Reg D List?

~~~
eries
Yes, similar to NYSE and NASDAQ. All of our exchange fees are regulated:
[https://www.sec.gov/rules/sro/ltse.htm](https://www.sec.gov/rules/sro/ltse.htm)

------
aninditaghosh
Great initiative! how do you plan to attract buyers and sellers to create a
meaningful and transparent exchange.

------
woshea901
When will the LTSE be open for investors to buy shares? Will focus be on
institutional investors or retail?

------
shireboy
How can an average investor buy stocks on this exchange? Will they be
available in regular stock brokerages?

~~~
eries
Yes, all of our listed securities will be available in regular brokerages. If
your current broker allows it, you can even ask them to direct trades to LTSE
as opposed to another exchange. Although most retail brokerages do not allow
customers do specify this, a few do.

------
dakial1
What is your view on the whole Derivatives issue? Because they seem to be very
problematic as it seems that a small part of it is really used for useful
business objectives (like hedging) but the vast majority of them is used as
plain, bubble generating, gambling in the markets (as the subprime chaos in
2008). Will LTSE address this issue in any way?

~~~
eries
Yes, but I don't have anything to announce at this time.

~~~
dakial1
Good. Now I'm curious.

------
aninditaghosh
Great Initiative ! How do you plan to attract buyers and sellers for
transparent exchange?

------
AndrewWarner
What a bold move, Eric! What does a Minimum Viable Product for a stock
exchange look like?

~~~
eries
You’re looking at it. MVP doesn’t mean “fast” in some absolute sense. It just
means fast compared to the underlying cycle time of the relevant industry. I
think we did pretty well with this one.

That said, there were many many many MVPs that you don’t see that informed the
direction we are at now.

In some way our private company tools are also an MVP of sorts:
[https://ltse.com/tools/](https://ltse.com/tools/)

------
NicoJuicy
Will there be a limitation on buying/selling to prevent automated traders?

( Or plans for this)

~~~
eries
No, that’s currently not legal in the US

We focus instead on finding ways to differentiate the experiences of the
“tourist” speculators from the “citizen” long-term investors

~~~
Loughla
>We focus instead on finding ways to differentiate the experiences of the
“tourist” speculators from the “citizen” long-term investors

Can you expand on this?

~~~
eries
Sure. I don't have an objection to short-term investors, even the long-term
investors like having them around to provide liquidity. But I don't think an
investor who has an average equity holding period of 10 minutes should be
involved in corporate governance.

------
dfscarter1
When will you see the first companies list and how do I invest in these
companies

------
isaacn
Is there an index fund where I can easily buy into all the companies in the
LTSE?

~~~
eries
Not yet

------
Avalaxy
How much time and money did you spend building the MVP? How did you validate
it?

~~~
eries
We have raised on the order of $90M so far. It cost us almost $20M to get to
the initial regulatory approval

I’ve answered about MVPs elsewhere in this thread but a big part of what made
this possible is our superior cost structure due to being a software-native
company

Validation I’ll have to answer a little later, once we make a little more
progress

------
ryanjodonnell
What's the smallest a company can be to consider being listed on LTSE?

------
obi-wan
How did you decide on your first early hires and how did you convince them ?

------
NicoJuicy
Add a 1 minute delay on every order and most automated trading would be gone.

~~~
qwertox
I'd prefer trading timeslots, like once every 10 minutes, with randomized
execution order.

You put your orders in, they all get queued up and then the queue gets
executed randomly.

That would force the traders to think in different terms, closer to the real
value of the asset.

------
venantius
What are your thoughts on listing foreign companies? Asking from the UK.

~~~
eries
LTSE should work fine for any company that wants to add a secondary listing to
access US capital markets, so long as they otherwise meet the listing
standards

------
mazspork
How often can you trade? Once a day (at the same time)? As you like?

~~~
eries
We are a RegNMS complaint exchange which means we don’t restrict trading or
liquidity. We have found ways to make our reforms effective without having to
go there

------
yalogin
Isn't this solved by an app that only lets you buy and sell long term? I mean
why do we need a new exchange for it?

Sorry, if that sounded harsh. I am not familiar with the business nuances
around exchanges and so the question.

------
mmhsieh
how do you handle M&As when companies are absorbed by other companies that
don't live by the charter? grace period, or are they just dropped?

~~~
eries
Same as any other exchange. The new entity will either have to meet the
listing standards or be de-listed.

------
vinayp10
How is this different to equitybee.com or carat.com?

------
billman
Best of luck Eric. I can feel the ship turning.

~~~
eries
Thanks

------
matthewfelgate
Not all good ideas make good businesses.

------
unemphysbro
I always thought that the LTSE would be an excellent crypto/ICO use-case.

------
studpeace
If you're starting I think you should read the lean startup

------
polskibus
Please compare LTSE to IEX, why is LTSE better?

------
tempsy
what incentives do companies have to be "long term focused" in a market
environment that has become highly frothy and speculative due to central
bankers?

when investors will buy anything that whiffs of growth and executives can
raise debt for cheap and raise secondaries easily no one on either side is
exactly clamoring for a "long term" focused exchange right now.

~~~
eries
No one? At least a few people are clamoring for it, surely?

There are some investors and companies that tune out the noise and try to make
lasting change, making a dent in the universe, that kind of thing. I think
they could use financial infrastructure to support their ambitions. Seems
pretty simple to me

~~~
tempsy
clearly you’re biased, but hard to imagine the actions of the Federal Reserve
that has pumped liquidity into the economy and cut rates to 0 that many
predict will last for 5+ years make an exchange that is focused on “long term”
less interesting to both executives and investors.

we live in a market when there’s a dozen SPACs listed every week and a company
like Nikola that doesn’t even have a functioning product has a valuation of
$20B. liquidity and support from central bankers have naturally made investors
more patient and willing to ignore short term road bumps.

------
waynenilsen
What support will there be for high frequency trading? What is required for
Direct Market Access? Will the realtime data feed be public? What is the fee
schedule?

~~~
eries
\- What support will there be for high frequency trading? LTSE's market is
designed to create a level playing field for all market participants. We
provide equal support across all of our members.

\- What is required for Direct Market Access? A relationship with a member of
LTSE who offers DMA.

\- Will the realtime data feed be public? Yes, LTSE's market data can be
accessed via the SIP's (Securities Information Processor) under the "L" quote.

\- What is the fee schedule? Free/Free (Add/Remove)

~~~
waynenilsen
Regarding "a level playing field for all market participants" I don't believe
that in an exchange that supports HFT there can be a truly level playing
field. There are some technologies that can help mitigate the effects of HFT
on the market. One is the approach that AZX [1] took where you do large and
infrequent dual auctions. Another approach is to go with an Automated Market
Maker (AMM) technology and eliminate the need for order books all together as
has become popular recently in the cryptocurrency space. Some background
research can be found here [2] but what really took off was Uniswap's
innovative use of a "Constant Function Market Maker" [3]. This allows average
individuals to provide liquidity while getting the benefits of what is
normally only reserved for high frequency traders. I believe that an
institutional grade AMM program would be greatly democratizing for the
industry.

[1]
[https://en.wikipedia.org/wiki/Arizona_Stock_Exchange](https://en.wikipedia.org/wiki/Arizona_Stock_Exchange)
[2] [http://reports-archive.adm.cs.cmu.edu/anon/2012/CMU-
CS-12-12...](http://reports-archive.adm.cs.cmu.edu/anon/2012/CMU-
CS-12-123.pdf) [3] [https://medium.com/bollinger-investment-group/constant-
funct...](https://medium.com/bollinger-investment-group/constant-function-
market-makers-defis-zero-to-one-innovation-968f77022159)

------
omega3
Sounds like something designed to impair price discovery and efficient
allocation of capital. Ultimately this will rise the cost of capital for the
companies listed there.

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lrobinovitch
As we're seeing right in our face on the West Coast of the US right now,
climate change is going to continue to get worse, affecting the globe at least
as much as the pandemic and for much longer unless we take serious action now.

Does the LTSE structure support companies oriented towards developing rapid
climate solutions that will pay off in the longer term, but not at the rate of
typical venture investments? If this isn't a focus, why not?

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eries
Yes. I don’t think any other platform is better suited to such companies

