Tagged: Indexes

Correlating Volatility

“Measure the performance of equity securities in the top 85% by market capitalization of equity securities listed on stock exchanges in the United States.”

I made it a sentence here but I clipped that phrase from a Blackrock iShares “minimum volatility” Smart Beta Exchange Traded Fund (ETF) prospectus and Googled it, and got back pages of references.  Apparently many indexes and ETFs meant to diversify and differentiate investments are built on the “top 85% by market capitalization.”

That by the way is about 700 companies. There are now over 700 ETFs in the US stock market and about 3,700 total public companies when you strip out funds and multiple classes of stock.  That’s a 1-to-5 ratio.  If many ETFs track indexes comprised of just 20% of the stocks, would that not produce high correlation?

Answer:  Yes.

I ran correlation for five ETFs from Blackrock, First Trust, Schwab, Vanguard and Invesco (USMV, FVD, SCHD, VIG, SPLV) over the past three months and it was about 90%.  Now, all five seek similar objectives so correlation isn’t surprising. But in truth they’re brewing a mixture of the same stocks.

We had the chance to participate in a wine-blending last month in Napa. The group was tasting mixtures of a core set of grapes.  What if we make it 94% Zinfandel, 3% Petit Syrah and 3% Malbec?  How about 7% Malbec, 3% Petit Syrah, 90% Zinfandel?

The same thing is happening with ETFs. They’re blending the same grapes – stocks.  What if we weight a little more than the index in WMT and a little less in AMZN?

It’s still the same stocks. And it’s earnings season.  Think about the impact of high correlation when in nearly all cases save an outlier handful ETFs track underlying indexes with defined composition.

Say you report results and your stock plunges (we’ll come to why in a moment). Even minute weighting in a falling stock can skew the ETF away from the benchmark, so the authorized participants for the ETF sell and short your shares, raising cash to true up net asset values and ridding the ETF of the offending drag.

At some future point now that your shares are sharply discounted to the group and the market, arbitragers will find you and the authorized participants (brokers creating and redeeming ETF shares to ensure that it tracks its benchmark as money flows into and out of the investment vehicle) who shorted will cover, and suddenly you’re the star again.

Neither up nor down did the behavior of your stock reflect fundamental value or rational thought. It’s high correlation, which rather ironically fosters mounting volatility. We’re seeing a notable increase in instances of large moves with earnings.  And your shares don’t drop 15% because active investors saw your numbers and decided, “Let’s destroy our portfolio returns by buying high and selling low.”

In the last week through Monday, Asset Allocators (indexes and ETFs) and Fast Traders (arbitragers speculating on intraday price-changes) were top price-setters.  Both are quantitative, or machine-driven, behaviors. One is deploying money following a model and the other is betting with models on divergences that will develop during that process.

Both create mass volatility around surprises in earnings reports. Fast Traders are the athletes of the stock market racing to the front of the line to buy and sell. Asset Allocators are lumbering, oblivious to fundamental factors and instead following a recipe.

You report.  Active investors stop their bits and pieces of buying or selling to assess your fundamentals. Sensing slight change, Fast Traders vanish from order books across the interconnected web comprising today’s stock market.  Asset Allocators tracking benchmarks stop buying your shares because you’ve now diverged from the broad measure.

This combination creates a vacuum.  Imagine selling your house and there was a bidding war for it and suddenly all the bidders disappeared. You’d have to cut your price. What changed?  The number of potential buyers, not the value of the house.

This is the problem with how a combination of Fast Traders and Asset Allocators dominate the market now.  Fast Traders set most of the prices but want to own nothing so the demand they create is unreliable and unstable.  Asset Allocators are trying to track benchmarks – that depend on Fast Traders for prices. Throw a wrench into those delicate gears with, say, a surprise in your quarterly earnings, and something will go awry.

Speaking of which, our Sentiment Index just turned Negative for the first time since February and yet the market soared yesterday.  From Feb 8-11, futures contracts behind some of the most actively traded ETFs in the market, concentrated in energy, rolled. The dollar had just weakened. Stocks roared.

The same futures contracts just rolled and the ETFs rebalanced (May 6-11). Counterparties covered. The dollar is rising. We may be at a tipping point again for stocks. Derivatives now price the underlying assets.

False Passive

Karen and I are in Boston seeing friends at the NIRI chapter (we sponsor) and our trip today like last week coincides with snow in Denver. Next winter if the slopes turn bare, we’ll schedule a couple flights to bring in the blizzards.

Last week trooping through Chicago where you had to lean to stay upright in the wind, an investor-relations officer told me, “Passive money can’t be setting prices because it’s, well, passive. It can only follow active money.”

Sometimes I’m so close to the trees of market structure that I forget about the forest everyone else is seeing. Statisticians warn about false positives, false correlations, false precision. The descriptor “passive” for investment behavior following models inaccurately portrays what the money is doing. We call it “Asset Allocation” behavior.

To understand this money let’s first review how the stock market works:

It’s a data network comprised of visible nodes called exchanges and invisible ones called formally alternative trading systems and colloquially “dark pools,” stores for stocks where you must be a member to buy. Exchanges are required to serve all customers, who must either be a broker or use one.

All markets share customers and prices. You cannot continue to serve a customer in one market including a dark pool at a price worse than what’s available elsewhere. Thus, trades must match between the network-wide best price called the NBBO – national best bid/offer (best price to buy or sell).

Orders wanting to price the market must be automated so they can rapidly move from one node to the next, or the data network can’t function.

-Because of this structure, exchanges offer trading incentives called “rebates” to more frequently have the best price on the network. They pay high-speed traders about $0.29/100 shares to bring orders to their markets and set prices.

-The NYSE, the Nasdaq and BATS Global Markets operate multiple exchanges, rather than one that would aggregate buying and selling, so as to increase the amount of time each group has the best price, which means fast traders create many prices. By our measures, fast traders are eight times as likely to set prices, but with just 100 shares.

Exchanges want to set prices because any broker or market center handling customer orders must give customers the best prices so all are required to buy expensive pricing data, which is how exchanges make money.

Now you understand the stock market. Onto this network come seas of money from Blackrock and Vanguard and a raft of exchange-traded funds. For two decades investors have been choosing passive investment in accelerating fashion. It’s how Blackrock and Vanguard are the world’s biggest investors ($8 trillion of assets) and ETFs host $3 trillion while turning holdings at 2,500% (making buy-and-hold a parody).

Passive money is governed by the model it tracks, the prospectus describing the fund, and inflows and outflows. Tack on the explosive popularity in recent years of “smart beta” money tracking mathematical measures to capitalize on trends or market inefficiencies and you have a recipe for perpetual motion.

To that end, indexed money by rule must peg its benchmark – the measure metering its performance. Indexes use options and futures to mirror the benchmark so counterparties for options and futures are in and out of the market. That sets prices.

The majority of trading in ETFs is a form of arbitrage. ETFs don’t buy or sell stocks. ETF sponsors privately transact with authorized participants in large blocks. In the market, people are trading ETF shares that simply represent assets held by sponsors. Market-makers are shorting or going long components to capture inefficiencies, and fast traders are repricing components, indexes, options and futures for spreads.

All of this is setting your price. If money flows into SPY, the world’s most actively traded stock with $25 billion of volume daily, arbitragers, market-makers and authorized participants must respond. This trade splashing through your peer group may move members disparately at times because of liquidity, options, futures, shorting.

A paradoxical cycle forms. Indices fluctuate because of arbitrage in ETFs predicated on them, which prompts indexed money to adjust, which must happen because rules for indexes demand it.

The sheer size of this money has pervasive market impact, often blotting out effort by active investors to buy or sell growth and value opportunities (uniform rules and uniform trade-executions overwhelm outlier orders, key to why stock pickers rarely beat indexes).

There’s little that’s passive about passive investment. Call it Asset Allocation. But it lacks emotion, reason and common sense. That’s why markets are unresponsive to terror attacks or flagging economies but wedded to monetary policy. It’s about the model.

Follow the Line

Money is better than poverty, if only for financial reasons.

So wrote Woody Allen for himself as Broadway Danny Rose in the eponymous 1984 film. I’m not sure what Allen meant then as I was a high-school sophomore wearing a mini-mullet. But there’s an application to IR.

Last week I had an intense exchange with an investor-relations officer new to the chair and moved over from the sellside after losing his job in research to advancing asset-allocation investment (This is Blackrock to Betterment, the translation of business strategies into squares on a Rubik’s Cube. These investors buy no research with commissions and listen to no earnings calls but track governance, meaning the biggest investors now are tuned more to rhetorical position than financial condition – I leave risk/reward ramifications to you).

Cognitive dissonance by definition is an inherent contradiction between evidence and conclusion. In Steamboat Springs it’s easy to match evidence to conclusion when watching the weather. If storms approaching from the south cross over Catamount Lake, you’re going to get showers on Mount Werner, the ski hill. Simple. No cognitive dissonance. You can see what’s happening.

But it struck me listening to this new IRO that he’d not drawn a line between his emigration from brokerage to corporate belfry. It reminded me of that lyric by Jacob Dylan, son of Bob and troubadour with the Wallflowers, who refrained plaintively how the same black line that was drawn on you was drawn on me and has drawn me in. Despite the origin of his demise on Wall Street, this IRO was certain active investors were pricing his shares. “Indexers don’t set prices,” he insisted. “They track active money.”

This view defies what we just saw from the NYSE where his shares are listed. When the exchange stopped trading for nearly half the day July 8, it was to make sure the closing cross – the ending auction setting prices for indexes and ETFs – would go off properly. The world’s greatest equity market sacrificed most of the trading day to one chronological exigency. And that’s because the most vital endeavor is tracking benchmarks – pegging the index. Getting the data right.

Follow the drawn line between diminishing sellside influence and the shift of equity research analysts to the IR chair and how the market functions. It’s drawn us all in to a 6th Avenue Heartache in a way, because what moved markets before doesn’t now, and if you suppose so, I refer you back to the definition of cognitive dissonance.

But it’s not sad! It just changes IR Best Practices – things we should all be doing. Our profession’s requisites must include comprehension of how prices are set so that the information you provide to management is accurate. Five rules:

Number One, high-frequency trading is a product of incentives paid by exchanges to fast traders to create valuable pricing data that exchanges can sell back to brokers. This is the No. 1 price-setting force (only half of intermediation is fast trading; the rest is from brokers working orders for customers).

Number Two, the buyside and sellside have spent billions over the past decade to disguise whether they’re buying or selling, so translating “block trades” into “long-only investing” doesn’t follow the money.

Number Three, the greatest force in the equity universe today is not love but asset-allocation. Blackrock and Vanguard. And they do price your shares routinely.

Number Four, more than 50% of your volume is the middle men (fast traders, brokers disguising orders) not actual investment. Factor that into your thinking.

And Number Five, there is little to no “long only” money anymore. Everybody uses a smartphone, and everybody hedges. Derivatives are a colossal factor because they represent risk-transfer and leverage and often (as yesterday in equities) price the underlying asset.

Connect the dots. Follow the money. Think. Okay, so money is no elixir and as Woody Allen said, it may be superior to poverty for financial reasons only (smile). But in the IR chair (and in politics) you should always follow it, because it’s the line of truth.

Defend Yourselves

You need to defend yourselves as public companies.

This clarion lesson comes from last week’s trading halt at the NYSE though we think the exchange handled the outage correctly. Humans want pictures of perfection like Saturday’s Balloon Rodeo in Steamboat Springs. But don’t expect serendipity in securities markets. Your equity is the backbone of your balance sheet, basis for incentives, currency for investments. Know how it trades.

The root of the NYSE’s July 8 200-minute trading penalty box is the Flash Crash, a May 6, 2010 plunge and recovery in equities that spanned about a thousand Dow Jones Industrials points in twenty minutes.  During that maelstrom, trades executed at stale prices because timestamps on orders didn’t keep pace with market activity.

Now five years later, the exchanges are aiming for a July 27 deadline on two updates to timestamps mandated by Finra and the SEC. The new timestamps will calibrate to 100 microseconds are less, with one coming from orders occurring at exchanges, and the other timestamp for ones flowing through broker-operated dark pools relying on proprietary data feeds.  The thinking here is better timestamping will improve market-function and offer better future forensics. For instance, was there separation between exchange and dark-pool prices as occurred in the Flash Crash?

You don’t have to know this in the IR chair. But what if the CEO or CFO asks? It’s the market for your shares. There’s a great deal more to it than your story, a point made stark in a moment.

The NYSE claimed it had been testing timestamps and made a mistake in a deployment. Why test new code when the Chinese market is imploding, Greece is teetering on the Eurobrink and volatility is exploding in US equities – all of it interconnected through indicative value-disseminations for global indexes and ETFs that depend on timestamps?

Be that as it may, the NYSE handled the problem appropriately by stopping trading, cancelling orders and focusing on getting operations fixed in time for the closing auction. That in itself points to the larger lesson, which we’ll articulate in a moment. We heard lots of talking heads say “our fragmented market is a plus in crises because people could continue trading.”

The outage in fact demonstrated the opposite. We measured in NYSE data that day an 18% reduction in Fast Trading generally for NYSE issues, and commensurately higher investment behavior. In other words, with trading halted for half the day, speculators were less able to interfere with real investors’ moves.

By extension, we can infer with data support that much of what occurs intraday is effort by arbitragers to spread prices among securities that must track benchmarks – market indexes – by the time trading concludes.

Guess who supports that effort? The exchanges.  I’m not castigating here. But if you’re depending on information from an exchange (or its partner) to understand your trading, you had better darned well know how the exchange operates.  When the Nasdaq charges traders to buy shares at its primary market and pays them to sell at the BSX platform, it’s helping traders multiply prices and spreads. Do you see? Paying traders to engage in opposite actions incentivizes arbitrage. All exchanges pay traders for activity that’s got nothing to do with investment.

I’ll rephrase:  The exchanges fragment markets purposely in order to sell data and create transactional opportunities. It would be akin to your real estate agent encouraging others to bid against you as you’re trying to buy a house.

The NYSE’s trading halt proved that a fragmented market harms investors and helps arbitragers, because when it was closed for three hours there was less fragmentation and more investment – but lower volume. Volume often confuses busy with productive.

Don’t track volume without also metering what sets your price! Yet that’s not the Big Lesson for public companies.  No, it’s that the single most important pricing event of the day is the closing auction. And the audience depending most on it is the one tracking benchmarks (not taking risks like active stock-pickers).  Blackrock and Vanguard – the Asset Allocators collectively and by extension.

The number one force in your market is tracking broad measures, not weighing your earnings. This money is perpetually owning and yet constantly trading to match index-movement. You must quantify the price-setting actions of this colossal demographic group. If you don’t, the intelligence you’re offering management about what’s driving your price is almost certain to be incorrect.

Defend yourselves with an objective view.  It’s part of the job. Counting on exchanges is yesterday’s way.

Quiet Midday

The midday equity-market silence is deafening.

Writing for the Wall Street Journal last week, Dan Strumpf roiled capital-markets constituents describing how stock-trading is now focused around the opening bell and the last half-hour, with volume dribbling otherwise.  NYSE strategists are now contemplating a midday auction.

Successful solutions spring from correct diagnoses. The issue isn’t that Everyone Goes Away at Midday. What’s occurring is symptomatic of structure in both the equity market and institutional investment. This is the giant elephant in the stock-market room. Concentration early and late in volumes reflects the explosive growth in passive investment.

The investor-relations profession predicates its existence on differentiating the corporate story.  You target investors appropriate for your stock. You get out there and set meetings to see investors.  You tell the story unflaggingly. You run a good business, delivering the results you’ve helped investors to expect.

Fine, good. There’s just one problem. This strategy obviates the bedrock principle of public speaking: Know your audience.  In the 1980s when stock-pickers dominated market volumes that weren’t coalesced at the open and close, rational investment behavior led and corporate competitive differentiation mattered most.

Today, the elephant is the core audience. For ten straight years investors have been shifting from picking stocks to allocating assets.  Over that time, the once-fringe notion of using statistical models to invest in stocks has become the predominant approach. Blackrock, Vanguard and their dollars by the trillions today see equities as products.

We flew to the Bay Area yesterday and after our first plane experienced mechanically related delays, we switched flights and I found myself crammed into a rear row next to a Schwab employee from the sprawling Denver office. She’s in the Registered Investment Advisor group, supporting independent planners. Schwab has now launched “robo advisor” services for both retail and advisory markets in response to growth at firms like Betterment, Wealthfront, Personal Capital, Motif Investing and others.

These automated investing services identify your preferences and goals and then construct a model to match them. In Schwab’s case the models are entirely ETF-driven and rebalance daily to match allocation targets.

Advisors could have ignored the elephant trampling the traditional model. The smart ones are embracing them. There’s a lesson for public companies: The elephant of passive, model-driven indexes and ETFs isn’t obscuring your audience. It IS your audience. This is what institutions are doing now.

That doesn’t mean you stop telling the story. It does mean that what you measure, how you gather investor feedback, what you tell management about stock-valuation and how you target investors – in fact, how you see the job – must change. We can’t ignore the giant passive-investment elephant in the room, and go on doing the same things.

Which gets back to silence at midday. Indexes and ETFs are paid to track benchmarks. Tracking is best served by orders near the close. As passive investment has exploded, volume has concentrated in the closing half-hour to mark broad measures.

The opening frenzy is also a consequence. Traders hoping to move index components for arbitrage opportunities act early in the day, leading to frenetic sprints at the bell.  And buttressing this proliferation in model-driven money is mushrooming derivatives-use, from over-the-counter options to fixed-for-floating equity swaps, all of it about the elephant in the room and arbitrage. And 44% of market volume is rented – short, borrowed – to boot.

It’s all related.  A midday auction won’t help the elephant in the room or anyone else because it hasn’t diagnosed the problem. What might help is 24-hour trading. Indexes would be relieved of the need to be near a close.  But investment would then devolve into relentless and repeating arbitrage even more than now, the continuous plucking of profits on slight separations between securities.

We could disconnect markets and disabuse ourselves of the false premise that all need the same price regardless of size – which would bring the Passive Investment juggernaut to a halt and level the playing field again for stock pickers.

That’s not going to happen. Anytime soon, at least. In the meantime, IR professionals, embrace the elephant and make measuring its movement a core part of the job because it’s your core price-setter. It’s concentrating volumes.

And that’s the quiet truth.

Function Follows Form

Let me go. I don’t want to be your hero.

Those words strung together move me now viscerally after seeing the movie Boyhood, in the running at the Academy Awards, as I write, for best of the year. I’m biased by the video for “Hero” from the band Family of the Year because it highlights rodeo, something bled into the DNA of my youth.  See both. The movie is a cinematic achievement that left us blurry. The song is one I wish I’d had the talent in youth to write.

As ever for the ear that hears and the eye that sees, there’s a lesson for investor-relations. We might have heard MSCI last week refraining those lyrics – let me go, I don’t want to be your hero – to the ValueAct team, activist investors.

Over the past few years as activism has flourished, many companies have longed to be let go but have benefited from the activist grip. Herbalife and Bill Ackman.  Hewlett-Packard and Relational Investors. Dow Chemical and Dan Loeb’s Third Point.  Tessera and Wausau Paper and a raft of others just off Starboard.  On it goes, all around.

A curious condition has laid hold of stocks in the last number of years. It used to be that results differentiated.  Deliver consistent topline and bottom-line performance, do what you say you’ll do, explain it in predictable cadence each quarter – these were a reliable recipe for capital-markets rewards. Form followed function.

Activism by its nature supposes something amiss – that a feature of the form of a company is incorrect or undervalued, or simply operated poorly. By calling attention like the old flashing blue light at Kmart (have I just dated myself?), activists have often outperformed the market.

Meanwhile, the opposite has become more than an exception.  From our own client base we could cull a meaningful percentage of companies following the formula of consistent performance yet missing bigger prizes. (more…)

Adapting

Happy New Year!  We trust you enjoyed last week’s respite from the Market Structure Map.  Now, back to reality!

CNBC is leaving Nielsen for somebody who’ll track viewer data better.  Nielsen says CNBC is off 13% from 2013. CNBC says Nielsen misses people viewing in new ways. Criticize CNBC for seeming to kill a messenger with an unpopular epistle but commend it too for innovating. Maybe Nielsen isn’t metering the right things.

I’m reminded of what we called in my youth “the cow business.” The lament then was the demise of small cattle ranches like the one on which I grew up (20,000 acres is slight by western cow-punching standards). Cowboying was a dying business.

And then ranchers changed. They learned to measure herd data and use new technologies like artificial insemination to boost output. They adapted to the American palate. Today you can’t find a gastropub without a braised short rib or a flatiron steak. On the ranch we ate short ribs when the freezer was about empty.  But you deliver the product the consumer wants.

Speaking of which, a Wall Street Journal article Monday noted the $200 billion of 2014 net inflows Vanguard saw to its passive portfolios, which pushed total assets to $3.1 trillion. By contrast, industry active funds declined $13 billion. That’s a radical swing.  The WSJ yesterday highlighted gravity-defying growth for Exchange-Traded Funds, now with $2 trillion of assets.

The investor-relations profession targets active investors. Yet the investor’s palate wants the flank steak of, say, currency-hedged ETFs (up about $24 billion in 2014) over the filet mignon of big-name stock-pickers. IR is chasing a shrinking herd. (more…)

Perspective

It’s not what you think.  Heard that phrase before?

Last Wednesday, Oct 15, apparently everybody trading equities believed the world was dissolving in an apocalyptic stew of Ebola, European recession, unused petroleum, Chinese debt and Mideast terror. The DJIA at one point dropped 460 points.

Son of a gun. By Friday, October 17 we were back to milk and honey and Captain Crunch! The DJIA rose 263 points. Human nature is fickle. But this juxtaposition stretches credulity. It’s also a lesson on market structure.

In 2013, according to the Investment Company Institute, net US inflows to mutual funds were $152 billion, of which $52 billion went to target-date hybrid funds (mixes of bonds and equities based on one’s age), and about $53 billion to index funds, 82% of which track major market measures like the S&P 500. Exchange-traded funds garnered another $180 billion, mostly equity instruments that track funds tied to indices.

If two-thirds of the net new cash followed asset-allocation vehicles and a greater sum still sought ETFs, which post daily market positions, the likelihood that most of your price-movement reflects fundamentals is low unless you have an activist (event-driven money can catalyze bipolarity in market behavior – higher highs and lower lows).

There’s an animation sequence I’ve seen that starts with what appears to be mountains or desert from great height. Then our vantage point pans back and we see with surprise that it’s something else entirely: the brown pupil of a person’s eye.  We sweep back and the person is standing on a shoreline. Then back we scan across forests, mountains, rivers, countries and then continents until we’re in space seeing below us a lovely cobalt sphere, and we pan further, and it’s the blue pupil of a giant being. (more…)

Peer Review

Autumn the past two weeks splashed brilliantly over the Colorado Front Range. It puts everything into perspective.

I recall as a kid my mother saying in retort to my reason for some dunderheaded act, “You did it because ‘everybody else was doing it?’”

Investor-relations professionals have long tracked what everybody else is doing, comparing the company’s trading with a set of peers. Clustering similar things is a time-tested statistical maxim. We practiced it on the ranch of my youth at the auction yard, sorting groups of our steers on display for potential buyers uniformly by color, weight, shape. One weak link could throw off the average per-pound price.

What makes a peer?  Similar characteristics. Yesterday I sent a screenshot to an IRO (investor relations officer, for you newbies) showing startling comportment between her shares and another stock. One is a home-furnishings retailer, the other a technology high-flyer in cloud architecture.

On the surface, no distinguishing features say these two are peers. But machines calculating probabilities see patterns, not sectors. In human physiology, beneath the skin we’re all the same. We’re peers though we may not look alike. In the stock market, physiology is comprised of rules, prices, supply and demand.

It calls into question comparing how you trade versus peers. Yesterday one of our household-name clients asked, “We’re trailing our peers, so how can the cause be macro?” The data were overwhelming: No movement in rational behavior, massive change for indexes/ETFs and hedging. Our client is the “category killer” in that group, the one every index, every ETF, will own – or sell. Macro selling won’t hit peers the same, and either way, pressure wasn’t fundamental.

That’s no absolute either. Another category-killer in a different industry outperformed its peers because safe-harbor money was buying only the biggest. Plus, algorithms executing the same instructions in an industry group can produce different effects on components. (more…)

Binary IR

There’s a joke software engineers tell. There are 10 kinds of people in the world. Those who can count in binary and those who can’t.

Nerd jokes (no offense, technology friends!) are often neither immediately nor apparently funny. But the point is binary understanding, a sort of either/or perspective.

Suppose you were planning a vacation. After much research, you decide like Tiger Woods that you’re going to Cayo Espanto, off Belize. You reserve its luxurious accommodations, arrange for transit from the mainland, plan for time out of the office, purchase clothing and other supplies, even get your scuba certification so you can plumb the depths of the Great Blue Hole off Lighthouse Reef while there. Last, as an afterthought, you look for airline tickets.

And there are none.

If you’re Tiger Woods, you don’t need no stinking airline tickets (grammatically impaired colloquialisms are never accidental here). All analogies break down somewhere. But you get the point, right. Reserving rooms and laying plans before determining if the trip is possible is getting the horse and cart confused. And there is requisite order to the effective horse-and-cart combination.

Which brings us to investor relations and market structure. IR has always considered its objective to be singular. In geopolitical parlance, Message enjoys regional hegemony. There are no other considerations. (more…)