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Technology Stocks : The New QUALCOMM - Coming Into Buy Range -- Ignore unavailable to you. Want to Upgrade?

To: Jim Mullens who wrote (5833)	2/9/2010 1:25:06 PM
From: Art Bechhoefer	4 Recommendations Respond to of 9129

Jim, manipulation in New York law, I believe, relates to ANY publicly traded securities, not just stocks. As to sources for defining a "free market", the best is still Adam Smith. Distilled to its basics, a free market system requires the following conditions, each necessary but individually insufficient, in order to function: 1. No restrictions on entry or exit (i.e., nominal cost to all who wish to participate). 2. Numerous transactions such that no single transaction can individually affect market price. 3. Low cost access to timely information for all participants. I have cited these three requirements in a number of letters published in BARRON'S and Science (AAAS journal). In the latter publication (around 1995), I challenged Burton Malkiel's efficient market hypothesis on the grounds that it assumes a perfect market system that doesn't, and rarely if ever has existed. Put another way, if you believe in the efficient market, you would be better off not investing in individual stocks, but instead in index funds, because you can't beat the efficient market. You would be better off in an index fund instead of concentrating your assets in Qualcomm. Oops! What am I saying? As to the ultra fast trading that can now be done by sophisticated computer programs, its very speed abuses one or more conditions for the free market. The only way to prevent this sort of abuse is to place a tax on short term trades sufficient to discourage them. Warren Buffett once suggested a 99% tax on short term trades. I think that something of the order of 1 percent would do the job, especially because it would create a paper trading record that in itself would discourage abuses. Art