Sunday, 5 February 2012

Time for a Change - Corporately Speaking

It seems to me that shareholders these days are more interested in the profits from buying and selling shares than the dividends. This can lead to market manipulation, short-termism and excessive risk-taking by the boards of companies.

Perhaps it's about time that something was done about this and punitively taxing share profits such that the focus goes once more on real profits, rather than ephemeral ones gained from share prices. It would certainly lead to less short-termism and more realistic corporate valuations.

Anyone got a counter-argument?


  1. No : and what is worse - quite frankly it is frightening - is that the average length of time a share is held in the USA is less than a minute. Machine algorithms control the markets now, computer systems that search out minor changes in stock price and buy heavily (or sell heavily) as a result. The only solution is a tax on share deals : even a 0.1p tax on each deal would stop the buggers in their tracks as they conduct millions of deals per day.

  2. Alan - more like 50% tax on share sale profits if sold within 10 years.