Let me get this straight.  In 2008, funds trying to squeeze out another basis point or two thought they were being conservative  buying insurance on heavily leveraged portfolios of sub prime loans and other debt. Once those loans started to default, it  created a cascading deleveraging event which lead to major financial institutions failing and the “smartest” minds on Wall Street being forced to dump everything to raise cash, which in turn lead to a crisis of confidence and deleveraging that created the worst week in the history of the stock markets. Did I get this right ?

In 1987, funds, trying to squeeze out another basis point or two thought they were being conservative, buying insurance on leveraged stock portfolios. Once the stock prices on those portfolios started to drop, their insurance programs pushed them to dump everything AND sell stock index futures to raise cash, which in turn lead to a crisis of confidence and deleveraging that created the worst single day melt down in the history of the stock markets.  Did I get this right ?

Think it wont happen again ? Of course it will.  Whatever money the Fed makes available to stimulate the economy will be used, as intended,  by entrepreneurs and businesspeople to create and grow businesses.

Unfortunately, it  will also be used by financial engineers to try to find a way to make HUGE profits from  highly leveraged,risk laden financial packaging. Why wouldnt they ?

If you can borrow  cheap money  , invest  in some asset that can be marked to an increasing market, borrow  against the gain and buy something else and do it as many times as possible,  wouldnt you ? Its exactly how homeowners In a bull market drove up real estate prices with a few making huge money.

If you could do the same thing, but instead of with houses, with stocks or asset backed securities, and instead of with thousands, do it with billions so you could profits in the 10s of millions or more, wouldnt you ?

Hell yes you would. You certaintly arent going to tell yourself that you could be creating the next big bubble that could rival 1929, or for future generations, would rival 2008, so dont do it. You would go for the money.

Which is the genesis of our problem in the US.  Its not wrong to run with bull markets and leverage to the hilt. That can be a very good thing. But we have to make the upside based on investments, rather than financial engineering. Which is exactly why we have to change our tax code. We want to encourage investment, not financial engineering.

The financial  markets  were originally defined as markets that created capital for businesses to start and grow.

Today, that is rarely the case. Sure companies do come to the markets for cash for growth and that should be encouraged.  But those examples are a tiny percentage of the market.  When a stock turns over its float multiple times in a day, those are not investors buying and selling the stock. Those are traders or financial engineers.

The ONLY WAY WE ARE GOING TO END THIS BOOM AND BUST CYCLE IS IF WE DIFFERENTIATE BETWEEN INVESTORS AND EVERYONE ELSE.

Investors should be rewarded for actually owning companies and gaining returns on their investments. Financial engineers should have to pay a premium for the risk they introduce to the entire financial system. It was not investors that brought on the last 2 crashes. It was the financial engineers.

The beautiful thing about this country is that we like to work hard, and we like to take chances. Unfortunately, over the last 15 years, the incentives have been to take chances as a financial engineer rather than as an entrepreneur. We give far more money to people who play games with financial instruments than we give to people who come up with ideas for the next big thing.  That needs to change if we want to remain a leader in this world.

Here is what I would do to change things

I would change to zero the taxes on any gains from the sale of stock or bonds purchased during an IPO and held for 5 or more  years. All dividends/interest paid by that stock/bond would be tax free. If you sell it prior to the 5 years, you are taxed at your personal regular income tax rate.

In addition, I would not allow the stock to be borrowed against in any way. If it was, it would be considered an effective sale. Which means you couldnt borrow on it tax free until you have held it 5 years.  Bottom line, if you hold the stock/bond , like a real investor would, you are rewarded for it.

For purchases  post IPO, in the open market,  the same rules apply, except I would tax a personal income rates the dividends/interest  for the first 5 years of ownership.

For all other transactions, whether they are options, derivatives, stocks, bonds, whatever, all gains and losses would be taxed at personal income rates.

If you are a great financial engineer and make tons of money at what you are doing, more power to you.If you are good at what you do, you pay more to Uncle Sam, but you still make a boatload of money.

I would keep taxes on private transactions, just where they are. Private transactions are less liquid and harder to value, which in turn makes them harder to borrow against. Which reduces leverage in the system and encourages investment. Its hard to financial engineers a private company. I would tax gains and losses in private companies at capital gains levels, but I would extend to  3 years the marker to not be considered a short term investment. I would keep the active vs passive rules.

Next there is the issue of leveraging. No one ever complains when cheap cost of funds creates leverage and drives a market up.  And no one ever will. So we have to set strict leverage limits. We set margin/leverage limits on day traders as the tech bubble burst. The only difference between the day traders of the tech bubble and the Investment Banks and AIGs of the world that cratered in this bubble is that the big guys started with more chips at the table. And they picked their own credit lines and there was no pit boss to watch over them. I would limit to 2x the leverage available on any asset that is insured by the government or is offered by any organization that is elgible for government insurance  or tax incentives of any kind.

Of course, I would still levy a fee of anywhere from 1c to 10c on every transaction of stocks or bonds which would go into a general fund, that I will call the “Oh Shit We Missed It Fund”. It will be there to fund the inevitable situation where someone figures out how to work around whatever regulations and tax code that is created.

As an entrepreneur, I can tell you that this would not change how I ever started or invested in any business. As someone who trades stocks, It would impact my investment decisions. I would only trade out of necessity. I would be willing to take lower yields on my investments, making it cheaper for companies to raise funding.

I also recognize that it would mean that the chances of the Dow ever hitting 14k in 2008 dollars is about as likely as my catching my elbow on the rim playing basketball. I dont think thats a bad thing.

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First rule of Investing. Dont fall in love with positions or try to prove yourself right. I thought we might get a bounce. I was wrong. I covered my short puts when the market started to shed its gains. So I lucked out there.

More importantly, i wanted to clarify my bullishness. I don’t think the markets will just immediately turn around, and i dont want them to.  I dont need to pick the absolute bottom of the markets to see stocks that pay good yields at these levels. More importantly, if they pay good yields at this level. They will pay better yields at lower levels.

Once  I made the decision to go long, I didnt just dive in and buy everything I wanted to own. I took a bite. The market traded down. I took another bite. And will continue to do so as the market falls until Im full.  The stock market is full of suckers. They bought their stocks hoping there was someone there to buy them at a higher price. When that disappears, they dont have any reason to own stocks, so they sell.  Selling in this age doesn’t mean calling your broker to bail out of stocks. it means moving money aroundin your 401k , from a mutual fund to a money market. From a hedge fund to a CD.

Individuals are capitulating. They just dont know it. They are being told to not sell their stocks. Most dont own individual stocks. They own shares of funds. Which they are moving out of equity funds and into money markets or CDs.  The wealthier are pulling money from Hedge Funds. In their minds they aren’t selling shares. They are protecting themselves, they are moving money. What they dont realize is that yanking their money from the funds, forces the fund to liquidate their assets in order to fund the withdrawls.. Mutual Funds, Hedge Funds ,are selling to meet the withdrawls. Forcing the markets down. How freaked out are some of these people going to be when they have to pay taxes on capital gains in funds they sold at a lost ?

We are also seeing a corporate margin call reminiscent of the Tech Bubble Burst of 2000. Back then execs of companies would take out loans against the stock they owned in their companies.  Back then they borrowed against 50pct or more of their stock values, never imagining the stock prices could crater. These days, execs are borrowing against their stocks again. Never imagining that the stock prices could crater to these levels. Well they have, so execs are being forced to bail out of their own stocks. I wouldnt be suprised to start reading that companies that sold puts disclosing that they

Hedge Fund, Mututal Fund, Exec Selling is pushing supplies of shares far beyond demand. Which forces prices down

I dont know how low the market will go, and I know this is very self serving, but from a portfolio perspective, the lower the better.  I have been saving cash for a rainy day, and its been pouring all week. Im in no rush to buy all the stocks that I want to buy.  If the market goes down, i collect dividends on the stocks i bought and I get to buy more of the stocks I like at a better price. If the market goes up, I can stop buying, collect dividends, and start saving for the next rainy day. And there will be another..

We have come down 6,000 Dow Points from the high. It can only go down 8200 more.  At some point before then, the companies become so cheap, you just buy them outright. At some point before then, the shorts start covering to lock in gains.  Either way, I waited all this time to go long, Im in no rush to buy. But buy I will. Im going long.

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I  could be an idiot. But I think now is the time. I put 8 pct of my net worth in DIAmond puts at 11000, as a hedge, and just sold them at a very nice gain. Very nice. Now Im short puts that I sold in not near as big a position, but nice.

Im going long.

Im not going to give you some historical perspective. The SEC killed any historical relevance when they stopped shorts on 900 stocks. Im buying because the only real uncertainty I see remaining is from the economy. So when you hear the talking heads giving you historical facts, stand up, yell at the screen “You are full of BS”

One thing I know is that starting tomorrow the shorts can get back in the market. I love shorts. Short create a foundation of demand for their positions. If a good company gets shorted, whether as a hedge, or because someone thinks the company will underperform, that short will need to be covered at some point. If the company outperforms, or the demand for the stock exceeds the supply, the price of the stock, like any baseball card, iwll go up. Which will provide incentive for the shorts to cover sooner than later. When that happens, the stocks go up. Shorts are good for the market. They make good companies go up in price.

When I look at the credit markets. The Fed and  Treasury and even international agencies are signalling that they will be the lender of the first and last resort. We see short term treasuries trading as if traders are starting to get comfortable with credit and liquidity. I think that although banks dont fully trust lending to each other yet, they are working to put together the scenarios under which they will trade. They are gearing up.

I have no idea what the economy will do other than the fact that it wont be good. How bad it will get, I dont know. But I can look at a company, discount what the projections are, then discount them some more, and come up with what I think is a fair price.

What is a fair price to me  ? Well I start with the Dividend first. No dividend, no buy. Wasn’t that a song ? No Dividend, no buy…oooh Or was it No Woman No Cry.. Any way I digress.

My first stomping grounds are MLPs. They have been getting killed. KILLED. They build pipelines, ships, whatever, and they do contracts to provide service via those assets.  The assets are very long term, and the cash flows are very consistent. I am putting together a big porfolio that will pay me more than 10pct yield. The nice thing about 10pct yield, is that its 10pct yield. As long as I watch them and make sure nothing changes in their business to impact that yield (and hopefully it improves and they increase the payout), then I dont have to mark to market on a daily basis. I just get paid.

Im also short  DIAmond puts (which track the dow jones). Why sell puts ? With market volatility (VIX) at an all time high, I wanted to take in some of the volatility premium in this bullish move. This is not a move for the faint of heart. I will have to watch this like a hawk. I have my parameters for covering them and If things zig or zag, I will cover, hopefully at a lower price than what I sold them for.

I’m also looking at stocks in industries that I know very well that yield 6pct or more. Dividends that I think are safe in companies that I think are very strong. This wont be a big part of my portfolio. Just a tasting.

Why  ? Because there are some good companies, in good businesses where I think the dividend is safe, and 6pct , plust hopefully future dividend increases is a good thing. Notice I didnt say a word about the price going up. It doesnt matter if the price goes up. It matters if the dividend goes up. The best stock to buy is the one you never have to sell. It just pays you forever. The concept that you own your share of the discounted cash flow of a company is the biggest lie ever sold by brokers in the history of financial markets. You dont own shit. The CEOs, you know the ones that pay themselves, but dont manage to pay dividends, they control and effectively own those future cash flows. So dont kid yourself. Buy stocks that pay dividends and get paid.  Even then there is the risk they can go to zero. So always be ware.

All that said. The stock market can humble me or anyone in a nano second. It could go a lot lower. I DO NOT SEE IT GOING DRAMATICALLY HIGHER. NO CHANCE IT GETS BACK TO 11k anytime soon.

But, Do not take advice from me. In fact, do not take advice from anyone. If your advisor  was so smart, they wouldnt be giving you advice on what to buy. They would be sitting on their yacht, being taken to port to hop on their helicopter to go to the airport to jump on their GV to go to their house on an island you have never heard of.  Not sitting in an office, on the phone talking to your about to go nuclear over the market ass..

Unless you know a company and industry as well as anyone, PUT YOUR MONEY IN A CD.   Buying and holding a CD that you renew every 6 months or so, and letting interest compound lets you sleep at night AND lets your money go up.

If you put your money in a CD, you have outperformed 99pct of fund and hedge fund managers around the world over the last 3 months and probably longer. Thats how smart you are. If you put your money in a CD, YOU MAKE MONEY EVERY SINGLE DAY OF YOUR LIFE. You never lose money. EVER.  The NASDAQ is below where it was about 10 years ago. It is 65pct below its all time high. You are smarter than the market when you put your money in a CD.

But if you are willing to do the work, and willing to approach the stock market like a trip to Las Vegas, with the knowledge of how much you can afford to lose. If you are willing to approach the stock market like your baseball card or stamp collection, where you realize value is about supply and demand. Then I think it might be the time to dip your toes in the water. If you do decide to take the GAMBLE, at least GAMBLE on a stock that you believe has a safe dividend.

Good Gambling and Good Luck

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Is our Dallas Mavericks.  The Preseason starts tonight. Not only can I not wait to get things rolling, but I can not wait for the election to be over.  Watching Tina Fey on SNL is hysterical, but its time to return the Maverick name where it truly belongs.  On our jerseys.

Any one know of any decent players named McCain and Obama that I can sign for the preseason  ?

Should I just put McCain on the back of a Mavericks jersey and have someone selling them at Republican rallies and on their website ?? Now thats an idea !

Think Tina Fey of SNL might have some fun with that ?

Go Mavs !

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You would think that in 2008 that markets should be efficient.  One market that certainly is not is the corporate bond market.

Any individual who has ever tried to buy a corporate bond knows how difficult it can be. There is no exchange for corporate bonds.  They don’t trade like stocks, indexes, ETFs, or anything for that matter. Each purchase is  more like buying a car than buying a stock. There is little liquidity for 99pct of the corporate bonds issued.

That is a huge problem on many levels. It makes it harder for corporations to issue bonds. It makes it hard for individuals and institutions to buy bonds. It makes it harder for buyers to sell bonds. There is no question that our money markets would be safer if there was a liquid market for the bonds money market and other funds hold.  Trying to sell bonds in even small volumes can be an adventure, and thats not a good thing

The very worst part of all of this is that it makes it so difficult to buy and sell  bonds,  stocks dont have to compete with bonds for buyers. Think about it.Thats a disaster.

If stocks and bonds truly competed for buyers, buyers would benefit. You would see more stocks paying dividends. Consumers would realize that bonds are less risky than stocks.  It wouldnt take losing all your stock in Wachovia to realize that Wachovia bonds were safer than Wachovia shares.

More competition between bonds and stocks would mean that consumers money would be safer. More money would flow into bonds and less into stocks, which means we wouldn’t see such dramatic moves in the stock market. Stocks wouldnt go up nearly as much, and they wouldnt come down nearly as hard.

One of the shocking problems of our financial system is that there is no exchange on which bonds trade.  Want to know the current pricing for a bond ? You have to call someone to get the latest price. That person has to go out there and figure out what is for sale and to buy and at what pricing. And pricing is not efficient.  Normally there is a HUGE spread between the buy and sell pricing. Want to buy or sell a big amount of bonds, someone literally has to go out and find buyers or sellers of the bonds. Its such a pain in the ass, and it is so incredibly inefficient, that for 99pct of consumers out there, its not worth the effort.

Which takes us to mark to market. With out an exchange, and with the barker system of buying and selling bonds, sellers in distress, like homebuyers in distress,  can and will sell to any willing buyer. Which means that prices are often below where they would be if there was an exchange. For example, if I knew that I was a buyer of ABC Company bonds if they fell to X price, there is no exchange to send me an alert that the price has fallen to that price, its time to buy. Nor is there an alert for the seller to know that I am a willing buyer. The seller has to hope that the desks they use to sell knows to call the desks I use to buy. Thats ridiculous

We need a market of bonds, just as we have a market of stocks, that is just as liquid as our stock market. Then maybe rather than the Fed being the lender that provides cash, it would be just as easy for GM to issue bonds into a liquid market as it was for Bank of America to issue 10 Billion dollars worth of stock into the market.

Now maybe Im missing something or don’t see something. All I know is my experiences trying to buy bonds as a somewhat intelligent and size buyer.  I have no problem saying that its a clusterfuck and it should change

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Our financial system is quickly become a Rube Goldberg contraption of quick fixes. We have yet to see any fundamental changes to how the business of business is done. There has been one theme to the financial engineering of Wall Street: Print money and give it away

Like any Rube Goldberg contraption, it seems great when you are desperate for a solution. The problem is that in hindsight its always a mess.

If the Fed is going to give money to corporations unsecured, what happens if they cant pay it back ? Yep, I dont know either. Does the Fed ?

How much are they going to loan ? Yep, I dont know either. Does the Fed ?

Which companies will get the money  ? I don’t know, but I own a bunch of corporations, can I borrow some ?

Does the Fed remember that it was leverage and the ensuing deleverage that got Investment Banks into trouble. Will there be leverage limits on corporations that can borrow money ? Just because the loans are just 3 months doesnt mean they wont be a problem./ How many times will  they let a company roll over the debt ?

How will the Fed’s Special Purpose Entity (which will actually lend the money) pick which companies to lend to ? Will they be Obama or McCain supported companies ? Defense contractors who need money to supply bullets for our troops ?

If the loans are unsecured, what will the Vig be ?  Cash ? Stock ? Preferred ?

Where is the transparency behind all of this ?

Call me a cynic, but I dont trust anything that doesnt offer me a realtime data stream

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Thats what so many want. Right ? I’m certainly not going to lie and say it is not a whole lot better having lots of money. I had a whole lot of fun and loved my life when I was eating mustard and ketchup sandwiches and sleeping on the floor of a 3 bedroom apartment that housed me and 5 buddies.

I have a whole lot more fun now. It doesn’t suck to be rich.

The question everyone wants answered, is how to get there. There are ways to get there. But there is not a template that works every time for everyone. It works sometimes. Getting there requires being ready when opportunity presents itself.

IMHO, change and uncertainty create opportunity. Times like we are facing now, with complete financial uncertainty are perfect times to start on the road to getting ahead financially.

First, here is WHAT NOT TO DO:

There are no shortcuts. NONE. With all of this craziness in the stock and financial markets, there will be scams popping up left and right. The less money you have, the more likely someone will come at you with some scheme . The schemes will guarantee returns, use multi level marketing, or be something crazy that is now “backed by the US Government”. Please ignore them. Always remember this. If a deal is a great deal, they aren’t going to share it with you.

I dont broadcast my great deals. I keep them all to myself. The 2nd thing to remember is that if the person selling the deal was so smart, they would be rich beyond rich rather than trolling the streets looking to turn you into a sucker. There are no shortcuts.

So what should you do to get rich ?

Save your money. Save as much money as you possibly can. Every penny you can. Instead of coffee, drink water. Instead of going to McDonalds, eat Mac and Cheese. Cut up your credit cards. If you use a credit card, you dont want to be rich. The first step to getting rich, requires discipline. If you really want to be rich, you need to find the discipline, can you ?

If you can, you will quickly find that the greatest rate of return you will earn is on your own personal spending. Being a smart shopper is the first step to getting rich. Yeah you have to give things up and that doesn’t work for everyone, particularly if you have a family. That is reality. But whatever you can save, save it. As much as you possibly can. Then put it in 6 month CDs in the bank.

The first step to getting rich is having cash available. You arent saving for retirement. You are saving for the moment you need cash. Buy and hold is a suckers game for you. This market is a perfect example. Right at the very moment when cash creates unbelievable opportunity, those who followed the buy and hold strategy have no cash. they cant or wont sell into markets this low, that kills the entire point of buy and hold. Those who have put their money in CDs sleep well at night and definitely have more money today than they did yesterday. And because they are smart, disciplined shoppers, their personal rate of inflation is within their means. Cash is king for those wanting to get rich

The 2nd rule for getting rich is getting smart. Investing your time in yourself and becoming knowledgeable about the business of something you really love to do

It doesn’t matter what it is. Whatever your hobbies, interests, passions are. Find the one you love the best and GET A JOB in the business that supports it.

It could be as a clerk, a salesperson, whatever you can find. You have to start learning the business somewhere.  Instead of paying to go to school somewhere, you are getting paid to learn.  It may not be the perfect job, but there is no perfect path to getting rich.

Before or after work and on weekends, every single day, read everything there is to read about the business. Go to trade shows, read the trade magazines, spend a lot of time talking to the people you do business with about their business and the people they buy from.

This is not a short term project. We aren’t talking days. We aren’t talking months. We are talking years. Lots of years and maybe decades. I didn’t say this was a get rich quick scheme. This is a get rich path

Now you wait for times of uncertainty and change in your business. The time will come. It may  come quickly, it may take years and years. But it will come. The nature of our country’s business infrastructure  is that it is destined to be boom and bust. Booms are when the smart people sell. Busts are when rich people started on their path to wealth.

You will know when that time is here for you because you will know your business inside and out. You will be ready because you will have been saving up for this moment in time

With all the change and uncertainty in the financial markets, there are people right now making more money than they ever dreamed of. They are the ones who have been living the real estate market and the financing behind it and understanding what actually what was going on. They re the one who understood the complexities of the credit markets. When everyone was following the crowd, they kept on saving their money and avoiding the temptation of groupthink.

Boom and busts happen to every industry. The question is whether you have the discipline to be ready when it happens for you ?

If you do, you will find out what it feels like to get lucky.

For more on how to get lucky, here is some additional reading for you

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Morale Hazard. Its another way of saying that Failure should have Pain attached to it. Wall Street is not stupid. While spreadsheets define financial risk, contracts define the personal pain of failure. When the financial rewards disappear or go negative, thats when the contracts get terminated or let expire. At which point any Pain associated with Failure tends to be eliminated. Here are a few steps that need to be taken in order to make sure that Pain remains associated with Failure.

1. Repricing of Options: It wont be long until we see the repricing of options in companies who’s stocks have tanked. Its another way to pump up executive compensation.  In addition to stopping Golden Parachutes, this Bill should prevent repricing of options for execs that participate.

For the rest of the public company universe, all option repricing should be required to be approved by a super majority of shareholders who actually vote .

2.  Closing of Hedge Funds: Everyone is a genius in a bull market. Hedge funds take their 20pct of profits when things are good. When things are underwater, not only do they not get 20pct, they often can’t start charging 20pct on profits until they recapture all losses. Rather than working their asses off to get investors back into the black, its not unusual for funds to close up shop.  Why work hard to get your investors their money back, when you can close the fund, start another hedge fund and start collecting your 20pct ?

Its particularly enticing after a bear market because the odds of making huge  money in the new fund improve dramatically.

The amazing part is often they will take the same investors they lost money for in the old fund, to the new fund. Why would investors follow a hedge fund manager who lost them money ? In the Hedge Fund world in a down market,  success is defined by outperforming their peers rather than actually making money. The fund manager may have lost you 20pct, but the market lost 24pct, so this is a good manager and you want to follow him/her.  So they take what money they got back in the 1st fund and put it in the new fund.

Hedge Fund Hopping is not necessarily a bad thing, however, it does encourage leverage and greater risk taking. Why wouldn’t a hedge fund manager leverage to the hilt and take bigger risks ? If it works, they make great money. If it doesn’t , you close up shop, move down the hall and do it all over again.

If we want to keep Risk and Reward, and Pain and Failure attached to inhibit future bubbles and melt downs, there should be a connection between closing a fund that has negative returns to its investors and your obligations to those investors when you start or go to manage a new fund.

If you start a new hedge fund after leaving one where the investors are in the hole within 2 years, some percentage of your profits from the new fund should go to investors of the old.

I will close with a question. Would you give 700 Billion dollars to a company whose CEO is going to leave the job in 4 months and you have no idea who the replacement will be ? Neither would I. The Presidential Candidates have to publicly committ to keeping Sec Paulson on the job (with his agreement of course), or publicly announce who will be running the 700 Billion Dollar fund, so we votes and taxpayers can vett him or her prior to their taking the job

I’m just saying..

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Tax every single share of stock that is bought and sold 10 cents per transaction. One dime. If you buy a share of stock, your brokerage pays a 10c tax. If you sell a share, your brokerage pays a 10c tax. 1 share, 100 million shares. Its 10 cents per share.

Of course the  tax will be paid for by those of us who are buying and selling stocks. So what. Here is the reality. If you are a true investor. Someone who wants to own a share of stock in a company you believe in, then its an amount that is not going to impact your investment decision making process.

If you are a professional trader or an institutional trader that trades continuously, then it may impact your decision making process, but only to the point of reducing your returns by a minimal amount. Its not going to change your inclination to trade. If you make 9.9pct instead of 10pct, you aren’t going to stop trading.

Whats the economic impact ?

If the NYSE, Nasdaq, Amex and OTC are trading 2 Billion shares a day, thats $ 200 Million Dollars PER DAY. If there are 260 trading days a year. Thats about 52 Billion dollars a year.

Thats real money.

Of course there has to be some fine print. You could reduce the tax per share for stocks under $5 dollars to 5cents. But i would leave it at 5cents even for stocks priced at pennies per share or less. This tax would act as a protection for investors and traders who get pitched unregulated penny stocks and who are more often than not the victims of rip off artists.

Take this $52 Billion Dollars and ????. I will open it to the floor for suggestions and save my conclusion for a later post.

5 dollar and under stocks

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What the stock market does today or any day  until short selling is restored, will tell us NOTHING.

The pundits are going on CNBC, Fox, Fox Business, Bloomberg, etc and trying to give us some historic reference and relevance of the big declines in the market yesterday.  They are comparing apples to oranges.

Without short sellers, we have no idea what shares are actually worth.

Short Sellers keep markets honest.

A market without honesty, what can that tell us ? Nothing.

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