| Home | My photos | Forex | My trading | Contacts |
|
|
You Can't Become Rich In Your Pocket Until You Become Rich In Your Mind | ||||
|
This includes mutual fund companies, pension and endowment funds, and money managers, to name a fewMicrosoft Bill Gates envisions companies having a digital nervous system so that they can see the trend coming at you.15 This is what the creative organization of information can do. For every new scientific advance created by a company like Intel, a wealth of software must be created to organize, monitor, and present data in an unobtrusive and natural manner. In this way it will become part of us, customized to our business and our lives, filtering out what we do not need. This is what makes Microsoft (NASDAQ symbol: MSFT) a company of the new dominant investment system It is easy to think of Microsoft in terms of the incubation interval where the focus was on how many people would buy the next version of Windows. The structure that Microsoft helped to create has moved the software business far beyond that. Computer software must safeguard essential services: utilities, money flow, and international trade. It must facilitate global ecommerce by solving currency and language issues. It makes the Internet functional, and it must enable every new device created by science. The entire point of software is customization. The surge of information that digital technology generates is only going to increase. Microsoft creates the means for us to ensure that we get just what we need. This makes the companys market infinite because the evolving digital environment means that our individual responses to that environment will always be changing. The billions of dollars that Microsoft spends each year on research and development proves that it is committed to capitalizing on this permanently evolving environment. TRADING INFORMATION New York Stock Exchange (NYSE) Rule 500 prohibits any company from voluntarily leaving the NYSE to trade elsewhere unless it does the following: Obtain approval from its board of directors. Issue a press release informing shareholders of its intention to delist. Obtain approval of its audit committee. Notify its 35 largest stockholders of record in writing of its in tention to delist. Wait for a minimum of 20 business days to a maximum of 60 business days before actually switching to another market. These restrictions on companies, by an institution that is supposed to represent the epitome of a capitalistic democracy, have some in our industry jokingly referring to the NYSE as the roach motel once you get in, you cant get out. Better to let a company trade its stock where it wants to. Better to have a market that is decentralized and open without the affectations of a private club. Better that it be a tool of capital formation for innovative and energetic companies and anyone in the world who wants to invest in them. NASDAQ It is extraordinary that a system that developed during the incubation interval to trade upstart companies like Microsoft would evolve into an icon of an entire new business culture. What chairman and CEO Wick Simmons calls the NASDAQ state of mind is the atmosphere whose characteristics are reflected in the new dominant investment system and the companies that represent it. The NASDAQ trading systems themselves are a metaphor for the accessibility and openness of the new investment system. Instead of a centralized trading floor, NASDAQ is a network of networks. It links broker-dealers, traders, electronic communications networks (ECNs), and order routing systems. The technology and market platform is accessible to any qualified market center or participant. The number of market participants it can accommodate is limitless. Already NASDAQ has the greatest capacity of any stock market in the world, and in 2001 it handled more share volume than all other major U.S. stock markets combined Belonging to the new investment culture means seeing beyond the performing of a service for a customer, to providing the means to individualize service and making it useful at many different levels. NASDAQ has accomplished this by turning all the data generated from its trading services into a real-time information library that can be used by NASDAQ companies and their investors. In 2002 NASDAQ took a dramatic step in facilitating our new, open investment culture when it introduced SuperMontage, the first trading platform that opens a window for investors to see what buy and sell orders have been placed for a stock. Until now, this information was privy only to specialists on the floor of an exchange. Average investors benefit in two ways. If they invest through mutual funds, brokers, or portfolio managers, these entities will be able to find better prices when NASDAQ stocks are bought or sold on the behalf of investors. The savings accrues to the bottom line in better returns. Additionally, SuperMontage protects buy and sell orders of individual investors. That is, if a limit order is entered into SuperMontage, it will not be traded through or bypassed. By ensuring that limit orders will not be bypassed, SuperMontage helps customers manage their risk in a rapidly moving market. SuperMontage redefines what is possible for a stock market by bringing new opportunities to investors. More buyers and sellers orders can be displayed, and investors will be able to see more of the orders that are available to them. Currently, professional and individual investors see only a market participants best buy and sell quotes in each security. In SuperMontage, market makers can input all or part of their buy or sell interest, by name or anonymously. This buy and sell interest will be available to view at five price levels, not just the best price. Furthermore, the new open architecture has additional benefits for companies that list their stocks on NASDAQ. Corporate CEOs and CFOs need to manage relationships with investors. This includes mutual fund companies, pension and endowment funds, and money managers, to name a few. In 2002 NASDAQ threw open a window to executives who list their stocks on NASDAQ when it introduced the Market Intelligence Center. This is a telephone- and Web-based suite of services that tracks a stocks behavior in the market. Consider that Intel has 70 market makers. Before the new system, a CFO had a like number of calls to make to learn what can now be ascertained in real time on the Internet. If the executive calls the Market Intelligence Center, an analyst will be ready to discuss the aggregate of transactions and orders affecting their companys stock price. On a typical day, NASDAQ currently disseminates more than 285 billion bytes of information, 6.5 million quotes, 2.5 million trades, 1.5 million orders, and more than 1.9 billion shares. NASDAQs new computer architecture will allow for even greater growth. Without NASDAQ there would be no new dominant investment system or new market culture. There would be no new business culture because there would be less of an ability to raise capital in the realize, capitalize, customize paradigm. There has to be a place for those companies, moving the world forward with innovations, to participate in the capital markets. Likewise, investors wishing to profit from these innovations need an efficient transaction system that stands for fairness and instills confidence. There will be trillions of dollars entering the financial markets during the next few years. It will be attracted there by the Digital Dow2 companies covered in this chapter and thousands of other NAS DAQ companies like them that represent the new dominant investment system. Investors need to know that the markets are liquid and that the enormous number of transactions that will be generated can be absorbed without creating large price swings in any one stock. A recent study by Amivest showed that NASDAQ is prepared for the inevitable surge in volume. The analysis revealed that more stock can be bought or sold on NASDAQ with less of an impact on price than in any other U.S. market.16 The last two volatile decades have provided a challenging testing ground for NASDAQ. Through every crisis it has proved it can support the new market culture by posting a 99.98% market uptime. The final test was September 11, 2001. At no time were NASDAQs systems inoperative. It closed for four days only in deference to firms and customers who were impacted by the World Trade Center attack. ENERGY There is nothing unusual about a single young company discovering a new market and successfully penetrating it with a new service. But when young companies like those just described emerge from every sector of the economy, shoveling out clutter to build efficient new structures, they coalesce into a potent force. There are people waiting and deadlines to meet, or we would have described every Digital Dow2 company plus the hundreds of others that are part of that force. When it is understood that trillions of dollars of business await those corporations, whose contributions are not luxuries but necessary moving parts of our economy, it becomes clear how intrinsically meaningless discussions of five-year-old performance numbers, statistics on market averages, or comments like What did the Dow do? have become. All of that is behind us, and we are on a different road, widened and paved through the efforts of visionary individuals at work in the companies of the new dominant investment system. All the rest of us have to do now is put one foot in front of the other and head down it. One must take advantage exactly as if he were setting a ball in motion on a steep slope. The force applied is minute, but the results are enormous. Sun Tzu, The Art of War NOTES 1. George Soros, The Alchemy of Finance (New York: Wiley, 1994). 2. Ibid. 3. National Economic Trends (St. Louis, MO: Federal Reserve Bank of St. Louis, August 2001). 4. Selling the Future: Concerns about the Misuse of Mutual Fund Ratings, unpublished manuscript, Lipper Analytical Services, Inc., Summit, NJ, May 16, 1994. 5. Burton Malkiel, Returns from Investing in Equity Mutual Funds 19711991 (Princeton, NJ: Princeton University, Center for Economic Policy Studies, 1992). 6. Morning Star Power: Morningstar s Ratings Became Critical Determinant of Sales, FRC Monitor (1996, May): 1-7. 7. Noel Capon, Gavan J. Fitzsimons, and Russ Alan Paine, An Individual Level Analysis of the Mutual Fund Investment Decision, Journal of Financial Services Research 10 (1996): 59-82. 8. Frank A. Schmid, Monetary Trends: Gambler s Fallacy (St. Louis, MO: Federal Reserve Bank of St. Louis, 2002). 9. George Soros, The Alchemy of Finance (New York: Wiley, 1994), p. 47. 10. Sun Tzu, The Art of War, trans. Samuel B. Griffith (New York: Oxford University Press, 1971), p. 10. 11. Megastores Like Costco, Sears, and Wal-Mart Sell Everything from Soupbowls to Wingnuts: Which Ones Do It Best? Consumer Reports 67 (2002): 13. 12. Ibid., p. 12. 13. Courtesy of Intels Web site, Ad Hoc Sensor Networks. 14. Ibid. 15. Bill Gates(with Collins Hemingway), Business at the Speed ofThought: Succeeding in the Digital Economy (New York: Warner Books, 1999),p. 5. 16. Amivest, December 2001. Pertains to companies with over $100 million value of float. The Amivest liquidity ratio measures the dollar volume of trading activity associated with a 1% change in price over a 20-day period. |
|
|||||||||||||
Previous Issues
|
| ©2007 Olesia | Home • My photos • Forex • News • My trading • Contacts |