April 11, 2009
When a investor invests in a business, the traditional method is to look at the fundamentals. If they believe it shows long term promise, they invest.
If they sell within 1 year, there should be penaltys, because it causes a disruption to the business & markets. If they sell the same day, a penalty of 3%, 2 to 30 days=2%, 31 to 180 days=1%, 181 to 365 days=1/2%, 366 days=0%, wheather they make or loss money. This would bring stability & long term investing back to the markets.
Short selling would not be allowed. If they are going to take possecion of the stock, they would have to invest in the normal manner.
Anything else(insurance, dirivitives, credit default swaps, hedge funds) are all side bets. Those types would be firewalled from the basic stock market, and not allowed to have any influence on the fundamental stock market. They would have to pay 25% up front & would have to validate they have reserves to cover the other 75% of these side bets in liquid assets, for each transaction
Options should be only for commodities. Investors in commodities could only be a business that is actually going to take delivery of that commodity(and consume it over a reasonable period of time), & requre a payment of 25%, with validated liquid reserves to pay the other 75%, for each transaction.
These Regulations should be World Wide. Lets get to it, We can do this!!!!!!!