From: Brian Atkins (brian@posthuman.com)
Date: Sat Jul 06 2002 - 07:41:05 MDT
Harvey Newstrom wrote:
>
> On Friday, July 5, 2002, at 11:02 pm, Technotranscendence wrote:
>
> > On Friday, July 05, 2002 12:12 PM Harvey Newstrom
> > mail@HarveyNewstrom.com wrote:
> >> I don't see forcing corporations to tell the truth about their
> > products
> >> as being coercive. It seems that hiding the truth or misleading the
> >> customer into making choices they don't want is the coercive action.
> >
> > Plus, why would you buy stuff from misleading people -- be they members
> > of a corporation or your local mom and pop store? Don't you think on a
> > truly free market, the problem would take care of itself?
>
> Just like Enron. Why would people buy stock from a company that lies
Some people will always buy the stock if they think it looks cheap enough.
Worldcom is still trading, and some people are still interested in buying
it, albeit at a much reduced price.
> about it books? Don't you think the problem would take care of itself?
> No. Until someone steps in and forces them to reveal the truth, nobody
> knows they are being misleading. Until the public claims match the
> actual truth, with no withholding of information, consumers cannot make
> proper decisions.
>
I disagree, and think the problem would take care of itself even without
organizations like the SEC (who so far did a piss-poor job, something I
don't expect to change significantly) to force them to do things a certain
way. What I think would happen is that in an "ecology" of companies, what
they would soon learn is that to achieve the best stock price for themselves
(and the insiders) they would have to voluntarily submit to plenty of
openness and fact checking by outsiders. The ones that didn't would suffer
a lower stock price or even be completely unable to go public.
And if the market went through a period where it turned out that a lot of
companies formerly thought to be solid had been cheating, it would quite
likely reprice most "solid looking" companies to be cheaper. Hmm, reminds
me of what we've been seeing over the past 6 months, no? Someday some
companies will "get it" and start doing a bit more to assure reliability,
and I will bet their stock price will then rise above their peers somewhat.
Then a whole bunch of other companies will notice that, and start doing it
themselves. The market abides...
As for how to discover that the books don't match reality in a young
market with few debacles under its belt, what you have to do is wait for
the company to go broke. Eventually it will not be able to pay its bills,
and word will leak out. Actually if you know Wall Street, you would expect
the word to leak out long before this. Too bad the SEC makes it a crime to
actively seek out such information and act upon it. It still happens though
of course.
-- Brian Atkins Singularity Institute for Artificial Intelligence http://www.singinst.org/
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