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0 pointsanon4002323y ago0 comments

> This is false. People invest on many year horizons all of the time when they believe in the company.

Granted, but they usually have the option to sell at many points along the way.

Think about an alternative financial instrument. What if you could invest $X in a public company (and get a higher rate of return because of the higher risk) but you lose the ability to sell until five years have passed?

This is one kind of option that might be worth trying. I want to see more mechanisms promoting long-term investment in our public markets. (Bonds are not identical to what I described BTW.)

The lack of these kinds of options (sure, bonds exist but I've not noticed them used with any notable significance in public companies) is why people talk about the short term quarterly focus of Wall Street.

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kortilla3y ago

I don’t understand what the point is. You have the option already to hold on for 5 years+. Many people do this (especially employees with vesting schedules) and they are rewarded for doing it.

> is why people talk about the short term quarterly focus of Wall Street.

This is a false meme though. Tesla was worth more than multiple profitable long standing car manufacturers combined before it ever turned a profit. Investors fixate on short term performance when the company has no long term vision and deriving cash flows is much easier (e.g. a container ship holding company).

anon400232OP3y ago

> You have the option already to hold on for 5 years+.

The difference is having the option. :) Behavior tends to be different if you don't have the option to sell during a window of time.

In this hypothetical case it might serve as a built-in grace period. Companies that otherwise might have failed if measured and punished quarter by quarter might have time to build a product over five year time horizon.

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