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Simultaneously they are opening up 0DTE options on certain stocks starting with large market caps but don't be surprised when this expands. Currently this was
by mcoliver 7mo ago
Simultaneously they are opening up 0DTE options on certain stocks starting with large market caps but don't be surprised when this expands. Currently this was limited to large etfs like SPX. They are also extending trading hours towards 24/7 and eventually 365.
How they square increasing liquidity with delaying information is insane.
I know there is a lot of manipulation to make quarterly numbers and the tax code is convoluted but if companies reported dollars in and dollars out live to shareholders at least we would have an idea of how the company is doing in a general sense. And over time would learn the flow of the company and be able to make informed predictions on the overall health of the company. More information is usually better than less with very few exceptions.
If they want to delay the earnings call to every 6 months to talk about the business I have no problems with that.
- bizzletk 7mo agoCan you enumerate some examples of when it having less information is better than having more?
- shermantanktop 7mo agoWhen your decisions are driven by fear, anxiety and FOMO, knowing less can lead to fewer irrational reactions. That’s why people hide information from bad bosses.
- baby 7mo agoFor the company it doesnt work well, you’re leaking too much info to competitors
- mcoliver 7mo agoMaybe. I'l am also not saying they need to say where the dollars came from, went to, or what they were for. Aggregate daily flows. Could you do some deductive reasoning to make an informed guess especially when large sums are involved? Perhaps. I am also of the (perhaps wrong) opinion that the majority of the important stuff leaks anyways, just not on a level playing field.
- fc417fc802 7mo agoIf everyone is legally required to share it then we're all in the same boat.
- hannasanarion 7mo agoFinancials aren't like technology or IP where having the information open to all (perhaps with limited monopolies on usage a la patents) is essentially for the betterment of all mankind, they can be more like order of battle in a war zone. If your competitors know that your Florida subsidiary is running inefficiently and being subsidized by your successful business elsewhere, they can target their own operations in Florida, undercut you more than you can possibly sustain, force you to exit that market entirely, so that they can monopolize there.
- fc417fc802 7mo agoSure, but others can also do that to your competitor. Hence my comment that everyone's in the same boat. The playing field would be level and the players would adapt to the new environment. Of course I realize it's possible it might introduce systemic problems that I'm unaware of.
- larkost 7mo agoIsn't this exactly what we should want from a market system? If your division in Florida is inefficient, then from the market perspective we should absolutely want competitors to enter the market and crush them. I think the problem is that people have gotten so used to seeing capitalism from the companies' perspective (i.e.: profits good), and forgot that it is supposed to be all about the collective good. So if you think sustained high profits are good... then you have missed the whole point (the market should always be driving them towards near-zero).
- baby 7mo agoI think thats the “nothing to hide” argument. Im not saying its wrong but its a philosophy
- vessenes 7mo agoIt’s a common complaint of value investors that boards (especially in this post-Sarbox world) are solely focused on quarterly earnings reports, to the detriment of long term strategy. One way to talk about the added and persistent value of some companies is to note that many of them have powerful, recalcitrant, or somehow anti-quarterly-cadence founders: buffet, zuck, you could make a list.
- cosmicgadget 7mo agoI mean those personalities are also hyperfocused on share price.
- rogerrogerr 7mo agoYes, but focused on it being the highest it possibly can _tomorrow_ or the highest it possibly can be in ten years is a huge difference. Only some executives have the ability to take actions based on a long view without being replaced by the board. Usually founders and near-founders.
- cosmicgadget 7mo agoRight so if you are already hyperfocused on tomorrow then focus on the end of the quarter is pretty much a wash in terms of short- versus long-term decisionmaking.
- vessenes 7mo agoI wouldn't say so - the ones I mentioned seem to be focused on long term value -- big difference.
- freetanga 7mo agoDelisting and going private is always an option if you want to go at your own pace and talk to your investors 1:1.
- kolinko 7mo ago
- bluecalm 7mo agoThere are multiples examples that are easy to see once you realise presenting information has a cost. For example having daily morning 2 hour long stand ups provide more information for everyone involved. It's also worse for productivity and work atmosphere.
- ethbr1 7mo agoFrom a company perspective, compiling a quarterly report is a non-trivial amount of effort. The company is employing additional resources (accountants) and distracting leadership (prepping talking points). I'm not firmly in one camp or the other, but it is a substantial amount of effort to release on whatever cadence the SEC mandates.
- SilasX 7mo agoWell, that's a whole area of active research, referred to as "info hazards": https://www.lesswrong.com/w/information-hazards https://www.lesswrong.com/w/information-hazards
- user3939382 7mo agoNo legitimate business needs to settle trades more than once a day.
- SilverElfin 7mo agoThis is a manipulation enabler. I’m surprised no one is mentioning this, but it’ll allow companies like SpaceX and Tesla to avoid scrutiny. The other changes the SEC and NASDAQ are rushing all have donors behind them. That’s how this openly corrupt administration works but it’s also how America has generally operated in the past, only to a smaller degree.
- mmooss 7mo ago> it’s also how America has generally operated in the past It's not. That's why we have the rules that they are recinding, and why the US has long had among the the most transparent, safest, and liquid markets in the world. Saying that 'it's always been this way' is a really concerted effort to bury one's head in the sand.
- SilverElfin 7mo agoI was talking about the broader way things work, not necessarily for the SEC specifically - although they’re also subject to this phenomenon. Lobbying in America, and the revolving door between industry and government agencies, is a core part of American politics and economics. Long before the Trump administration.
- mmooss 7mo agoAgain, it was not always this way. It's like saying drownings happened before the tidal wave, so it's always been this way. People will put up any defense against facing and acting on the reality of their situation.
- GolfPopper 7mo ago>This is a manipulation enabler. One facet of the Trump administration that still manages to surprise me is now some action that is nakedly corrupt, or stupid, or destructive will be undertaken, and people will scramble to come up with explanations for why it might be done in good faith, or as part of some clever plan. We've been watching Donald Trump operate in national politics for over a decade (and seen him in business for far longer). Why on Earth would anyone ever give him the benefit of the doubt at this point?
- munificent 7mo ago> if companies reported dollars in and dollars out live to shareholders at least we would have an idea of how the company is doing in a general sense. Goodhart's law is knocking on your door right now.
- mcoliver 7mo agoHelp me understand what you are saying here. For those that don't know this one is "a measure becomes a target, it ceases to be a good measure". I'm not advocating for a single metric that can be gamed. A business is fundamentally about dollars in and dollars out. Maybe add receivables in there and a few other metrics from the P&L. I'm not trying to be prescriptive here on purely cash in and out. I do think there is a low friction way that companies could report daily certain metrics that over time would give their shareholders a sense of the company's health and trajectory.
- ang_cire 7mo agoDollars/receivables in and dollars/deliverables out is just a question of rate, unless I'm missing something. If a 10 billion dollar company has a per-second dollar out/in rate of $1,000,000 due to actual organic business, a company with $2,000,000 can set up an LLC it buys and sells from, and legally 'swap' $1,000,000 a second back and forth in services "bought and sold" to mimic the appearance of the $10B company, to generate business interest/confidence/investment. That's an extreme example, but the point is that real-time money flow has nothing to do with the actual 'health' of a company.
- fc417fc802 7mo agoI'm fairly certain you're describing fraud.
- jongjong 7mo agoI'm fairly certain he's describing the economy. There are so many companies like this which are just moving money around rapidly in and out with little to no actual profit. Finance sector is easily gamed. For example, anyone can become a billionaire; just start a company, issue 1 billion shares at slightly above $1 each, keep most of them for yourself; release just 10K shares to the market and then let traders trade those same shares back and forth among themselves at high frequency... With just over $10k each, they can keep moving 10k shares back and forth 10k times per day... They call it "High frequency trading." There you have it; now you have a billion dollar company with a healthy trade volume of $100 million per day... Your stock is in-demand! And you just needed to find two traders with just $10k in the bank and a trading platform with low fees... Becoming a billionaire is not that difficult. You can apply the same principle to revenue... Just increase the velocity of money in and out of your company and you can hit any financial target you want. Doesn't mean it's a solid scheme but everyone likes the numbers they're seeing. Nobody is paying attention to actual buying power.
- gotwaz 7mo agoHomework - What does Shannon Information Theory say about too much info beyond channel capacity?
- JSR_FDED 7mo agoI give up, what does it say?
- mcoliver 7mo agoSure but I should add I'm not saying this should be done in place of current reporting. It should be done in addition to. I'm advocating for more transparency augmented with periodic storytelling. Over time that noise becomes the pulse of the company. Wrt Shannon, the channel capacity today vastly exceeds that of 1934 when quarterly reporting became standard. Give me more data and a filter any day over a once every 6 month black box. 6 month reporting is undersampling.
- gotwaz 7mo agoHow do we discuss Shannon if you dont tell us what your channel capacity is and how you compute it?
- deleted 7mo ago[deleted]
- fractorial 7mo agoSPY is an ETF and SPX is an index. The distinction is material. /ES does not trade between 5pm and 6pm ET. SPX options aren't marked until 8:15 PM ET. It's more plausible that large caps see MWF, then MTWHF possibly.
- mcoliver 7mo agoGood additional info. I used a shortcut I figured most people would understand without getting into the weeds.
- namtab00 7mo ago[flagged]
- tomhow 7mo agoPlease don't post snarky comments like this on HN. We're here for curious conversation. If you don't fully understand someone's comment, politely ask them to clarify. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- avadodin 7mo agoThanks. T+0 all-year-round trading is good in many ways bad in others —like losing the real investor liquidity spawning window at 09:30 EST as opposed to pure market making. Quarterly earnings were already a bad fit for many businesses so I agree with the measure to do away with them in principle. Someone proposed real-time and I think that would be a net positive if not very feasible. Yearly is a good compromise. Companies that are not profitable YoY usually have a story so they probably can avoid having to rob Peter to pay Paul. Then again, maybe everyone adapts and yearlies turn into the next quarterlies.
- pbreit 7mo agoMaybe just allow "insider trading".
- giancarlostoro 7mo ago> if companies reported dollars in and dollars out live to shareholders at least we would have an idea of how the company is doing in a general sense. A former manager used to run his own company, it was a satellite internet company sometime in the 2000s, they were going into the negative, so they had a big TV in the office, showing everyday what was coming in, and how much they made vs how much they owed. They did it to motivate everyone to go back into the green. Really interesting approach. Might not work at larger companies, but in a small shop where everyone knows everyone, it makes sense.
- bushbaba 7mo agoCan motivate the employees to jump ship. Often time as an employee you are impacted dis proportionately on the downside than the upside.
- lumost 7mo agoSmart employees understand this dynamic. When leadership hides information - it always means its bad. The first thing I noticed when I had a bout of bad employers was that they claimed "we can't share financial information because of XYZ investor/legal reason." Those startups all had major financial problems within 6 months to 2 years. Management has strong incentives to hide bad information from employees.
- robocat 7mo agoMost startups fail - it's almost definitional. Trying to connect the dots like you are attempting to, is a foolish game.
- lumost 7mo agoehh there is a common thread that when management becomes convinced either of falsehoods or that lying to employees is the best strategy, the business outcomes won't be the best either.
- 7mo ago
- paulsutter 7mo agoDon't invest in companies that disclose enough information. They aren't banning quarterly reporting, they'd just no longer require it.
- red-iron-pine 7mo agothere is no F500 company that likes quarterly filing. this is why they've been lobbying for it, and with Trump in power they pushed and got it. once it is gone none of them will do it, or at best will do it half-heartedly for a while. 5 years after its repeal there will be no large company doing it regularly
- paulsutter 7mo agoI'm definitely curious to see what happens My guess is that most report quarterly, my question is what they report. But we will see.