Bull Market

Since this is mostly about one mechanical aspect of markets - what is a "bid/ask" spread - it applies beyond the stockmarket to crypto markets. Except those tend to have fewer rules about the order book. If you're trading indirectly, which is not unusual with a brokerage, you should be aware of what is meant by "best execution", and I offer this article with an explanation in FX: https://medium.com/bull-market/oranges-and-lemons-the-fx-scandal-in-pe…

Here's a great explanation of the forex market development and rigging: https://medium.com/bull-market/oranges-and-lemons-the-fx-scandal-in-pe…

Here is a better explanation of what these traders did: http://www.bloombergview.com/articles/2014-11-12/banks-manipulated-for… Some additional reading: http://www.bloombergview.com/articles/2015-05-20/bank-fine-scorecard-f… Quote: "They also got together in chat rooms to, essentially, lay off some of their client risk to one another prior to the fixing. That laying off of client risk, again, looks a bit conspiratorial, but it probably made markets more efficient, and is not obviously bad or illegal. Then they went beyond that efficient laying off of risk, trying to move the price in their favor. They seem to have made some money doing this, at the expense of their clients, but my suspicion was that they were "tinkering at the edges of real supply and demand," optimizing how they made money trading their combined customer order book rather than truly rigging the FX market." This is an alternative viewpoint: https://medium.com/bull-market/oranges-and-lemons-the-fx-scandal-in-pe… Quote: "Although there was some behaviour that was clearly on the other side of the line, the regulators also made clear that lots of the practices involved were not intrinsically criminal; this was an investigation into a grey area, not a straightforward case of lying. Of course, the industry has less than zero claim to the benefit of anyone’s doubt, and people will be instantly suspicious of claims that “it’s more…

It’s scammy because the gym business can very difficult unless you have people paying and not coming in. https://medium.com/bull-market/sweaty-january-and-how-gyms-make-money-…

This duty does not actually exist, though many us-americans think it does. See https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to…

This is false and a misconception, see e.g. https://medium.com/bull-market/new-york-times-reporters-perpetuate-pop…

I don't think that's actually true. e.g. a quick google search turns up [1] [2] [3] which all state that a board is not legally obligated to maximize shareholder value. Do you have a source for the law/court decision? [1] https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations… [2] https://insight.kellogg.northwestern.edu/article/shareholder-value-pur… [3] https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to…

> "the sacred "fiduciary duty" to shareholders" It's imaginary: https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to… https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations… https://skeptics.stackexchange.com/questions/8146/are-u-s-companies-le…

That's apparently a popular misconception: https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to… In this case specifically, it's very unlikely that any group of shareholders could succesfully sue the Board about this compensation package.

Do they really though? https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to…

> If turning evil increases shareholder value, it’s their fiduciary duty to do so. Meh. Maybe not: https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to…

> So they have a duty to select a CEO who doesn't enable the unnecessary waste of corporate money on optional taxes. Waste is one of a very short list of categories that are considered something no one wants: https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to…

It's a bad thing. They're actively avoiding tax and hiding profits. It's not accidental and it's not all because they are reinvesting. They have decided that they shouldn't contribute to things that don't directly benefit them while using the tax payer built infrastructure and lobying to keep it that way. They're using this tax advantage to kill competition. https://medium.com/bull-market/amazon-minimizes-profits-because-ceo-je… https://www.google.com/amp/s/amp.theguardian.com/technology/2016/feb/1…

That's a commonly held myth. https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations… https://www.washingtonpost.com/news/wonk/wp/2013/09/09/how-the-cult-of… https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to… https://en.wikipedia.org/wiki/Fiduciary#Fiduciary_duties_under_Delawar…

Factually, corporations do not have a legal obligation to their shareholders to maximize their profits. That's a myth and a very absurd one at that. If it were true, Salesforce couldn't operate its various corporate charity programs as one example. You could have researched that one pretty easily: https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations… https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to… https://www.washingtonpost.com/opinions/harold-meyerson-the-myth-of-ma… https://www.quora.com/Taxes-To-what-extent-are-U-S-companies-legally-o…

Fiduciary duty, in the sense you are using it, is a myth (most likely created to justify shameful but profitable actions from corporations). A few sources: https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to… https://www.dailykos.com/stories/2016/10/6/1578437/-The-Myth-Of-The-Fi… https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations… There is such a thing as fiduciary duty, but it's not related to the common usage of public companies needing to maximize profit for shareholders.

The primary purpose is to make/maximize profits because that's what the shareholders want, not as an essential part of being a corporation. Instead of trying to explain concepts like "duty of care" and "duty of loyalty" and "business judgment" further myself, I'll just leave that to someone better qualified. https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to…

There Is No Effective Fiduciary Duty to Maximize Profits https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to…

There is an current academic debate about this: https://medium.com/bull-market/violent-warfare-is-on-the-wane-right-99…

Always good to have an opportunity to point to https://medium.com/bull-market/a-cynic-s-guide-to-fintech-3cd0995e0da3 "Fintech business model #1. Reinventing past mistakes of the banking industry because you don’t know about adverse selection"

Relevant to discuss the viability of different fintech startup ideas: https://news.ycombinator.com/item?id=9321019 https://medium.com/bull-market/a-cynic-s-guide-to-fintech-3cd0995e0da3 I agree that there is some naivety when attacking huge institutions as mentioned in the article. Particularly when it comes to dodging regulation. Rather than putting you on top dodging regulation is probably going to put you out of business when it comes to Financial Institutions. [P.S. will the Gods of HN please upvote my comment so I can have the slightest visibility here]

The idea that company directors have a fiduciary duty to maximise shareholder value is mostly a myth: it is one of those ideas that many economists like that seem to simplify things but actually can't be made to work. James Kwak has a nice article (Medium, sorry) on this https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to… > The specific fiduciary duties of corporate directors...are common law: legal principles that have been established by courts in the process of adjudicating cases over the years. As it turns out, in Delaware, which is the state that matters—not only because most large corporations are incorporated there, but because courts in other states tend to look to Delaware law when dealing with new issues of corporate law—there are exactly two fiduciary duties: the duty of loyalty and the duty of care. > They duty of care is basically the duty to pay attention to your job: in essence, to make decisions on the basis of reasonably adequate information. There is an academic controversy—fueled by careless uses of language by the courts—about whether the standard of conduct is negligence or gross negligence. But the point here is that the duty of care isn’t a duty to do any particular thing, such as maximize profits. > The duty of loyalty is marginally more complicated. This duty (like the duty of care) existed in agency law—the law governing the relationship between agents, such as employees, and principals, such as…

I think it is very unlikely that this would "work". The "business judgement rule" means that boards get a huge amount of latitude in how they run their business, especially absent "disloyalty" to the business (like enriching themselves at the company's expense). In a 2005 case (re Walt Disney Co. Derivative Litigation), the Court said "not entitled to any remedy unless the transaction constitutes waste... [that is,] the exchange was so one-sided that no business person of ordinary, sound judgment could conclude that the corporation has received adequate consideration." Your valuation has all sorts of uncertainties. Is there actually a market for the data? Even if it is from old, proprietary sensors? How comparable are those privacy experiments to a situation in which the sensor package is literally roaming your house 24/7? Is customer interest in privacy increasing (particularly in iRobot's target demographics?) and are there sales/reputational benefits for being one of the first companies to adopt this policy first? Any one of these is enough to ruin your case. It would have to be something really egregious, like a contract in which the data transfers to the CEO's brother-in-law, for it to be a breach of duty. * Business Judgement Rule: https://en.wikipedia.org/wiki/Business_judgment_rule * Dodge v. Ford is where this idea of shareholder profits first comes from. However, look at the discussion under "Significance"…