firstname.lastname@example.org (Bruce) wrote in message
(Bill Wallace) wrote:
I am confused by your comment, did you never have a first post to this
group? In any event, perhaps you can explain how insider trading
creates even one victim (other than because the government says so)? I
can see how it creates jealously, but it is not logically possible for
the *reason* why someone sold shares (since the selling itself is not
illegal) to harm anyone.
Insider trading is not a "victimless crime", because the insiders
bought and sold shares using information not yet available to other
shareholders or potential shareholders. Do you realize the implications
of treating insider trading as a normal business practice? It's not the
government that is over-reaching here (there are plenty of other places
where that is the case), this is a case of the stock market itself
wanting this kind of regulation. If insider trading were legal, the
market itself would fall apart. Who, besides insiders, would invest
knowing that any good or bad news would be acted upon before the rest of
the investors had a chance to do something? This kind of practice would
make the stock market an unattractive investment for all but corporate
insiders, and there aren't enough of those to support a business,
otherwise the business would be a privately held company.
I understand without thinking about it too hard.
What gets me about Stewart is she's worth a chunk of money, I've heard
upwards of $1 billion (?). I heard she would have lost around $250k when
the stock tanked. To risk so much over so little doesn't make sense to me.
How come everyone's so up in arms over Martha, but has forgotten about
our prez, who did this on a much grander scale, more often? Was it
because he was technically "cleared" by the SEC - by the man who was
his personal attorney and by his father's vice-presidential counsel ?
"According to U.S. Securities and Exchange Commission records, on four
separate occasions Gov. George W. Bush disregarded federal statutes by
failing to file insider stock trade reports on a timely basis,
back-dating one trade by some four months. Moreover, one key trade
just a few weeks before Iraq invaded Kuwait -- but reported some eight
months late after the Gulf War was over -- netted Bush close to $1
million in profit as he sold stock in Harken Energy, an oil company
doing business in the Middle East wherein some of his father's largest
contributors also maintained substantial positions.
The SEC under President Bush carried out an incomplete investigation
of the younger Bush's pre-Gulf War trade in 1991 after key
presidential advisor George Jr. claimed that he filed a report, but
that the SEC had most likely lost it. (No one has really asked whether
the governor bothered to use registered mail to verify receipt of the
On Wed, 17 Dec 2003 03:53:17 GMT, Mark & Juanita
.. snip of typical hate-Bush rant
Perhaps you need to check out the difference between "insider trading" and failing
to file an insider trading report in a timely manner. Insiders are allowed to trade
stock, they have to file their intent to do so and then report afterwards.
So you think that if the buyer had known the same thing that the
insider knew, the buyer would still have bought the stock? At the
prevailing price before the news was known? Maybe if that buyer were
one of the e-bay bidders for the decrepit motorcycle referenced in
another thread. Most intelligent people would take one look at that
news and run far away from that particular stock. Otherwise, why did
the stock tank after the news was made known to the general public?
After all, people who were going to buy the stock should have continued
to do so.
Not at all, see above.
Don't you think lack of insider trading laws would further inhibit
free information flow? After all, if I'm an insider with superior
information, why would I ever want anybody else to get information until
I had profited from it?
What you have just done is shut out a significant majority of
potential stockholders and limited it to just those who have the means
and wherewithal to mount a lawsuit against those who violate such
agreements. ... or put their trust in a corrupted class-action system
in which case-sharks pocket 60% or more of settlements and leave the
actual victims with pennies on the dollar.
Again, you keep referring to this as a victimless crime. If Martha is
guilty, she committed fraud, she sold something she knew was worthless
for the price of what undamaged goods would be. Would you consider it a
victimless crime for you to sell a used vehicle with a transmission that
you absolutely knew was going bad (or was bad) to someone for the same
price as if the vehicle was in perfect condition? It is one thing to
sell something and have it fail in the future -- both you and the buyer
are acting on the same information; it is quite another for you to
withold critical information in order for you to redeem your value in
something that is known to be less than you present it to be.
The buyer of Martha Stewarts stock wouldn't have bought it if that bit
of inside info was known to all.
This isn't a victimless crime. Period. As a small investor, I would
never ever buy any stock from any company if insider trading were the
norm. Why would anyone else? Why take the very large risk that the
company I've checked out as thoroughly as possible using publicly
available into, but had a problem that only the management team knew
about? The management team uses that hidden info to sell/dump their
investment at the then higher price than it'll become after the
problem is finally made known after their sales are made.
That's where the victimization comes in.
Greetings and salutations.
On Thu, 18 Dec 2003 08:52:15 -0600, Lazarus Long
Indeed. To reiterate...for the stock market to be fun
to play in, we all need to be on the SAME level playing field. That
is...we all need to have access to the SAME information. How well
we analyse and interpret that information should be what determines
how well our investments do. Secret informaton, shared amongst
a few insiders puts mountains on the field, meaning that SOME
folks are going to get screwed OUT of money and others will make
it hand over fist. Good if you are the latter, bad if you are
Interpreting facts can be a subtle thing and depends on
good observation. For example, a few years ago, a friend of mine
came back to town after a trip up North to visit relatives in
Indiana and Minnesota. He immediately called his stock broker
and told him to purchase a bunch of John Deere stock. The broker
was reluctant, as JD was not doing well, but, made the transaction.
Later that year, the stock took a big jump up when JD announced a
much rosier future, thanks to some large, long-term projects that
had come in. How did my friend know to do this? Well, he drove
by one of the big JD facilities and saw that they were building
a LOT of buildings there, to expand their manufacturing capabilities,
and rightly assumed that the company would not do this unless
they expected to make a bushel of money off it.
Observation is the key.
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