I propose a secondary 'book value only' stock market in addition to the current

IN the BVO price/book would always be 1:1. Values would go up or down depending on periodic financial reports. Suspicious companies would be audited, etc.

 

Talking about stock value not the price of the businesses actual infrastructure. Note businesses can also issue bonds to finance themselves all though this is very rarely done. Tell me do you know what the difference between preferred and common stock is? The reporting value is for tax purpose is basically the purchase price of the stock which may be wholly disconnected from the current value of the stock on the market.

 

Guess again.

but there's no incentive to buy. Investing is the process of placing money on a stock/group of stocks and making gains. You're getting distracted by the day-traders fervid activities.

Again you're not seeing the forest for the trees. Investing in stocks is a long term effort not a Las Vegas table gain. Take a look at a plot of DJIA or Nasdaq - over longer periods the trend is up. Stock investing isn't like a Christmas club, It's long term.

. A mutual fund is just a collection of individual stocks and they react just like the larger market.[/quote]It's never been offered because it's not a system to accumulate wealth.

 

None of that offers any kind of substantive argument against a 'Book Value Only' stock exchange.

Or, rather, it's not clear to me. Feel free to elaborate, state your case.

You seem to be implying that 'book value' is wholly disconnected from the current value of the stock.

Your disconnection point is not in dispute, nor is it relevant to the OP.

You seem to be saying that the only purpose of a book value is for tax purposes, which is false.

Neither are substantive arguments against a 'book value only' stock exchange.

We can discuss these more in depth, if you like.

 

If you think you can make it work come up with plan find a way to finance and capitalize your idea, Right now all you've is a thought experiment not anything like a business plan.

 

You are more likely to find highly volatile stocks on the NYSE than in the more curated lists of major indices like the Dow and the S&P 500. Not referring to the whole, so don't pettifog on that particular point.

Maybe not to you. But the needs of investors are diverse.

You need to consider that the very concept of a 'book value only' stock exchange brings with it an innovative approach to valuing companies, which can actually create unique investment opportunities. Imagine an exchange where every stock is priced purely based on its book value. This means every stock you're looking at is priced exactly at its net asset value — the total value of the company's assets minus its liabilities.

Now, think about what happens in traditional markets where stocks often trade well above or below their book values based on market sentiment, future earnings potential, and other factors, even manipulation by 'Wolves on Wallstreet' types. On this proposed exchange, stocks trading at their book value would eliminate a lot of the speculative element that often distorts stock prices. This could attract investors who are looking for more conservative, value-based investments, particularly during times of market volatility when traditional stock prices might be seen as overinflated. Gone are the booms andd busts that have plagued the market in history. Surely there is a kind of investor, slow but steady, that would appreciate this type of stock.

Furthermore, this type of exchange would provide a clear incentive to buy for those who are adept at spotting companies with solid fundamentals that are likely undervalued even at their book value — perhaps due to temporary issues that a savvy investor can see past. When these fundamentals are strong but the market hasn’t yet recognized the company’s true potential beyond its net assets, that’s an investor's cue.

Another point to consider is that by focusing on book value, investors might feel a greater sense of security. They know they are buying into companies at a value not inflated by market euphoria, which might appeal especially to risk-averse investors. In addition, for companies, being part of such an exchange might encourage them to manage their assets and liabilities more efficiently to maintain a book value that is attractive to investors.

This model could attract a different kind of investor, one who is looking for tangible, asset-backed value and potentially less risky investment opportunities during turbulent times. So, I don't find your argument compelling, whatsoever.

Except when they boom and bust. Not likely to happen on this exchange. It's long term for some, but not for everyone. To smooth out volatility, you have to invest in something like mutual funds, but this exchange achieves a similar security, but one doesn't have to buy a mutual fund to get there. Someone might be interested in stability with a handful of stocks that they are personally interested in.

Now, on the BVO exchange as I am proposing it, not everyone could qualify. Only companies with steady but solid growth over a period of time would be allowed to issue stocks on the exchange. The stocks have unique ticker numbers and can't be traded on other exchanges. These stocks are strictly long term growth, no bidding long or short on this exchange. This might not be an incentive for you, but there are many types of investors. I'm a capitalist society, supplying demand is everything, diversity and choices in the market place is all about capitalism, and I suspect there might be a demand for this, I'm still exploring the idea.

I do believe there would be a demand for it, conceptually, what I'm looking for is someone who really knows the ins and outs, nuts and bolts, to tell me if I might be overlooking some nuts and bolts impossibility. You're not going to convince me on the 'incentive' or 'demand' argument. there's no way to know, really, unless a comprehensive survey is conducted. I think a lot would depend on the regulatory framework.

It's never been offered because it's not a system to accumulate wealth.[/QUOTE]

So you say, but you've not offered a compelling argument against. I'm remind of the tortoise/hare metaphor, think of this approach as the tortoise.

 

So you say, but you've not offered a compelling argument against. I'm remind of the tortoise/hare metaphor, think of this approach as the tortoise.[/QUOTE] How much of the above are your on words? I've already dealt with the hare/tortoise metaphor, BTW. MOST investors buy for the long run, the day trader are just pests on market operations. The question also rises how many shares are available, and how is the market run?

I think you need to break away from AI and work or your human intelligence.

 

Of course it's a just an idea, wondering if there are anything on the nuts and bolts side (including issues of legal framework required) that I don't know about which would make the idea not viable. No one has offered such, thus far. Only arguments about whether it would sell, which, in my view, is not knowable unless a formal survey was conducted.

 

In both cases there are more cons than there are positives. Based on that alone...no.

 

Well ideas are not shut down just because of an AI output. It's a starting point, that's it.

 

That's the point... If an AI can point out more cons than pro's...then it truly is a bad idea.