Tagged: Volume

Livermore Lesson

A guy from Cumbria in the UK has built a Twitter Tape Machine.

Programmer Adam Vaughan was long intrigued by ticker tape, the stock market technology standard from 1869, when Thomas Edison patented a version better than inventor Edward Calahan’s, until the 1960s when TV and computers made paper tape spitting out price and volume for stocks obsolete.

Mr. Vaughan built his device from spare parts and networked it to check his Twitter feed every thirty seconds and burn anything new onto a strip of thermal cash-register paper. No ink. No checking the device. Tear off the strip and read.

It’s a goofy idea. Isn’t it better to scroll a phone screen with your index finger?  But you can order the Twitter Tape Machine if you’re moved.

Sometimes we need absurdity to shine brightly before we see things.  Nobody reads ticker tape anymore. And yet. Price and volume scrolling on screens is still the standard.

Jesse Livermore started trading stocks in 1891 after working as a board boy transferring figures from ticker tape to the quotation board at Paine Webber. In his tumultuous life speculating in stocks, he famously made $100 million shorting the 1929 crash – the equivalent today, using an income measure of worth, of about $7 billion.

He’d be the John Paulson, the George Soros, of then. Before the riches, on May 9, 1901 Livermore lost $50,000. He later said, “The ticker beat me by lagging so far behind the market. The divergence between the printed and the actual prices undid me.”

A hundred years ago the top high-frequency trader of his time saw opportunity in the gap between posted and actual prices. Today we call that “latency arbitrage,” one form of profiting on price-differences by spotting lagging price patterns. You need machines in the National Market System to win the gap trade, and firms like Tower Research and Hudson River Trading have made it an automated science.

Livermore made and lost fortunes, going bankrupt three times, living large and then committing suicide in 1940, saying in a note his life was a failure. Ticker tape won in the end.

But Livermore was an outlier. Most of the prices and volume on the tape then came from committed investment.  It’s to me fantastically ironic that the SEC was formed in the 1930s to mitigate nefarious “bucket shop” short-term manipulation – and now under a heavy regulatory regime half the market’s volume is a form of exploitation via short-term price-moves. Every one of those costs you minutely, investors and companies.

Leveraged ETFs, investment funds sanctioned by the SEC that use derivatives to deliver one-day directional bets, are arbitrage. Speed traders exploiting slow and fast prices, intraday volatility, divergences from the mean tracked by passive investments, are arbitraging, profiting on price-differences.

Where Livermore was on the cutting edge in 1929 shorting stocks, today 45% of ALL daily market volume is short – from borrowed shares.  Routinely now we see shorting running up as prices rise and down as prices fall. Traders make money via a sort of above-the-surface, below-the-surface trade that works best in a placid VIX environment.

If speculators exploit the tape – price and volume – why do price and volume remain the convention for measuring what investors think? In a market riven with arbitrage?

On every investor-relations website are displayed price and volume. Ticker tape. As if that connotes fair value when we know so much volume, the relentlessly changing prices (our clients average 14,000 trades daily – 14,000 theoretical different prices!), reflect arbitrage.

It’s absurd if you think about it. In 1901 Jesse Livermore could exploit patterns in the tape, and the tape showed price and volume. In 2017, price and volume remain the key data points public companies use to measure the market. But exploitation has exploded.

Investors and public companies alike should be going BEHIND price and volume to the patterns, trends, drivers. Price and volume are consequences. Patterns are the future for well-informed constituents. I suspect even Jesse Livermore would agree.

Our new Key Metrics Report released yesterday for clients puts the focus not on price and volume but six metrics stacked by period, so one can see when the Livermores are leading, or Active investors committed to story.  Instead of searching the tape, scroll to see patterns in Rational Price, Engagement, Short Volume, Key Behavior, Sentiment.

Best, patterns signal what’s coming. There are patterns in weather, patterns in stocks, because mathematical principles govern both. And all things in this universe.

I imagine a day when on websites everywhere are Rational Prices instead of just market price and volume.  And more. But one step at a time!  First, learn your patterns. It’s the future. Price and volume are prologue, like the past.

A Rational Market

The market appears to have become the Walking Dead.

I don’t mean a collection of bodies reduced to bloody pulp by a barbed-wire encased baseball bat. That would be the Presidential election. (Aside: you who watched the new Dead episode know with nauseating certainty what I mean.)

No, market volume is a zombie compared to the summer. Volume was 6.7 billion daily shares Jun-Aug 2016.  Now we’re eking out 5.8 billion, a drag-footed, scar-faced amble.

Usually it’s the other way around.

Meanwhile, business media has been fixated (somewhat ironically) on the Passive invasion that’s digging a giant hole and burying stock-pickers. The Wall Street Journal last week ran a half-dozen stories on the death-grip indexes and exchange-traded funds have laid on investing. Not to be outdone, CNBC covered the big lurch into market passivity all last week.

Both reported how Blackrock has amassed $5 trillion of assets (while, we’d add, ignoring the sellside, discounted cash-flows and earnings calls).  A WSJ article titled Passive Can Be Very Active described how leveraged ETFs classified as passive vehicles drive immense daily volume (we told you about these things a long time ago).

But volume is moseying. So wither the wither?  It looks like Passive is responsible. Now, the market is a uniform beast in which every barcoded thing must behave like the rest or regulators fine it for looking different, by which I mean failing to trade at the averages. If any stock so much hints at departing from the crowd it’s immediately volatility-halted.

I exaggerate for dramatic effect but only some. Rules create uniformity that makes standing out difficult. So over time stocks cluster around the averages like, well, zombies. The world’s most widely traded equity by a country mile is SPY, State Street’s ETF proxy for the S&P 500.  It routinely manages $25 billion of daily volume.

But that was last summer. Monday with the November series of options and futures trading marketwide – routinely it’s hectic with new derivatives – it managed about $11 billion, just 45% of its summertime tally.

We measure the share of daily volume driven by Passive investment marketwide. It’s not down a lot, 100 basis points or so. But that’s every day. And it ripples into options and futures that counterparties back with equity-trading as placid measures mean indexes and ETFs use fewer of them to true up positions. Weaker Fast Trading follows, and anemic ETF market-making. Pretty soon it’s the walking dead.

But there’s a storyline of survival. While the corpus of passivity has shriveled like bacon in a hot pan, or perhaps more accurately like one of those flex hoses when you shut the water off, underneath there is a turgid Active current.

I mean Active investment. We’re a data-analytics firm so we measure everything.  We know each day what percentage of our clients earn new Rational Prices (fair value) when Active stock-pickers buy.

Amidst listless Passive volume, we have seen surging Rational Prices.  On Oct 13, a stunning 32.7% of our client base had new Rational Prices even as volume wilted like pumpkin leaves after the first frost.

Last Friday, the 21st, the penultimate Friday before Halloween and fittingly hosting triple-witching, an impressive 15.5% of our clients were valued rationally by Active investment.

There’s a post-mortem here, a timeless market-structure lesson. First, volume that’s not Rational distorts fair value. Stuff that pursues averages hurts stock-pickers.

And if volume decreases while Active Investment improves its price-setting authority, volume does not equal value.  What matters is the kind of money setting price. With less competition from zombies, the enterprising can make supply runs.

That’s really great news for the investor-relations profession. Our civilization will endure. You don’t need big volume. In fact, if you have big volume the old convention that “you have a big holder buying or selling” is more often wrong than right.  Active money doesn’t want others to know it’s buying. If it does, you better be wary. That’s what Activists do.

There’s more good news.  Where Passive money that puts no thought into its movement is incapable of knowing what lies ahead and can slouch unsuspecting right off cliffs, that Active money bought October brings comfort. There’s Rational Thought in that forest that so often we can’t see for the trees.

Yes, the market like the storyline in the show depends on the zombies. They move the broad measures from one point to the next. You have to be prepared for the occasional slaughter while recognizing that the humans win in the end.  Rational thought trumps.

Bieber in a Bottle

Volumes are big but trades are small as markets pitch and buck.  On this restless sea, is there a message in a bottle?

That would seem poetic, were literature a help to your CFO in a stock market seeming the same hot mess as Justin Bieber’s Grammy performance Monday night. And what exactly was Kendrick Lamar doing?

If you didn’t see the Grammys, never mind. Back to US stocks, volume daily is leviathan, approaching 10 billion shares that as we noted last week must ionize through fewer than 20 firms on the way to sea spray. Markets last broke so furiously upon the shoals in August 2011 when it seemed the Euro might collapse (which begs that question anew and again leaves it unanswered).

Is it sound or just fury? Amid steep losses shifting to sharp gains into February options expiring today through Friday, trade-sizes have shrunk to the smallest on record.  TABB Group, the market structure consultancy, says average shares per trade in equities was of late 202 shares, dipping from the previous all-time low of 203 last October as markets surged like war from the trenches of August.

Conventional wisdom holds that blocks mark bigs. We’re told whales move in schools. But wait. The buyside and sellside have spent billions on trading technologies to make buying look like selling. The purpose of algorithms is deception.

Let me repeat that:  The purpose of algorithms is deception. Looking for blocks or watching the buy/sell balance means missing the technological revolution in trading the past fifteen years. At ModernIR, we preach a behavioral gospel.  All money is not the same. All prices are not equal.  The purpose of algorithms is deception (repetition is the best form of emphasis). Exchanges sell data, not products.

Against that backdrop, one key to understanding why stock-prices shift is recognizing that the market is not comprised of one behavior.  Suppose you were at the Super Bowl. Would you expect every person in the stands to act the same or might you anticipate bifurcation? Some portion of the audience will be rooting for one team and silent when the other excels. The weighting on sides determines the size of the roar and the silence.

Apply that to your stock.  The greatest mistake currently committed by executives of public companies is supposing the money in the market is a Super Bowl full of unilateral fans rooting for The Team. Recently I encountered an IR officer convinced that revamping the call script was the reason shares were up with earnings mid-November after falling with the call mid-August. That’s akin to supposing you caused an earthquake by slamming a door (August was China and expirations, not earnings).

There is one concrete fact you can know from big volume and small trades by taking the market at face value: A bidding war is underway. What’s knowable on the surface ends there. The rest resides lower.

You can measure the behaviors comprising your daily volume (this is what we pioneered – and if you don’t know what’s setting your price, you’re doing IR like a caveman).  Google, Amazon, Facebook, parse internet traffic. In the 21st century, companies should be parsing volume into demographic bands (if you think your exchange should be doing it, you’re right but misunderstanding what business exchanges are in).

Measure the market as it is. Because an approving roar may have the same timbre as derogatory boos. The last thing you want is your CFO before the Board like Justin Bieber on stage convinced the noise is coming from fans.

And that is the note in the bottle.

Water Down

Why are my shares down when my peers are up?

The answer most times isn’t that you’ve done something poorly that your peers are doing well. That would be true if 100% of the money in the market was sorting differences and was in fact trading you and your peers, and if the liquidity for you and your peers were identical at all times.

What is liquidity? Images of precipitation come to mind, which prompts recollection of that famous quip by whoever said it (Mark Twain gets credit but there’s no proof it was his utterance) that bankers will lend you an umbrella only when it’s sunny and take it back at the first hint of rain.

The Wall Street Journal yesterday carried a story about distressing levels of assets in big bond funds locked in positions that “lack liquidity.” Public companies, your bankers and shareholders have probably complained at some point about your “lack of liquidity.”

What it means is among the most profoundly vital yet most commonly overlooked (and misunderstood) aspects of markets. Things are finite. Public companies spend the great bulk of their investor-relations resources on Telling the Story. Websites, earnings calls, press releases, non-deal road shows, sellside conferences, targeting tools, on it goes.

But do you know how much of the product you’re selling is available to purchase? One definition of liquidity is the capacity of a market to absorb buying or selling without substantially altering a product’s value.

The WSJ’s Jason Zweig yesterday tweeted a great 1936 observation by Hungarian-born German émigré Melchior Palyi, longtime University of Chicago professor of economics: “A liquid structure never liquidates. Only the illiquid one comes under the pressure of liquidation.”

Think about that in terms of your own shares.  A liquid market can absorb the ingress and egress of capital without destroying the value of the supporting assets.

What’s your stock’s liquidity?  It’s not volume. We ran a random set of 11 stocks with market capitalization ranging from $300m-$112 billion. Mean volume for the group was 1.1m shares but varied from 50,000-5.6 million. Leaving out the biggest and smallest in each data set, we had a group with an average market cap of $6 billion, average daily volume of 755,000 shares, and average dollars per trade of $5,639.

That last figure is the true measure of liquidity. How much stock can trade without materially changing the price? In our group, it’s $5,639 worth of shares. So in a market with over $24 trillion of product for sale – US market capitalization – the going rate at any given movement is about the amount you’d spend on a Vespa motor scooter.  Now look at the dollar amount of your shares held by your top ten holders.

The stock market is incapable of handling significant movement of institutional assets. It’s a critically faulty structure if investors were to ever begin to pick up the pace of stock-redemptions. They are trying.  For the 20 trading days end Sept 18, the share of market for indexes and ETFs – Blackrock, Vanguard – is up 120 basis points over the long-run average, and stocks are down measurably.  Now, 1.2% might not seem like much but that’s more than $2 billion daily, sustained over 20 trading days. The S&P 500 is down about 5%.  At that ratio, if 10% of investors in indexes and ETFs wanted to sell, the market could decline 50%.

We’re not trying to make you afraid of water!  But this is the market for the financial product all public companies sell: Shares.  That it’s demonstrably ill-formed for a down market is partly the fault of us in the issuer community, because we’re participants and ought to be fully aware of how it works and when and where it may not, and should demand a structure supporting liquidity, not just trading.

Action items:  Know the dollar-size of your average daily trade (a metric we track), and compare it to the dollar-amount held by your biggest holders.  When your management team needs a risk-assessment, you’ll be ready.

The Cube

Investor-relations is an itinerant profession. We’re on the road a lot.

If you’ve had one of those three-hour flights, say from Denver to Atlanta, in a cramped regional jet (we’ve vowed to avoid them but United interdicts our solemn ecclesiastical commitments), you may utter profanities.

You might also ponder the supply chain. It takes work to match plane to demand so well that a body is wedged into every seat, leaving no logistical slack. Give airlines credit (or the finger) for it.

Like seats on planes, there’s a finite supply of your shares. If long-term holders never sell, who supplies them to new buyers, and how can your owners drive trading volume? The Investment Company Institute (ICI) in 2013 measured median portfolio turnover at 29%, meaning most big investors sold just a third of holdings over the year. Supposing a seller must exist for every buyer, you should see roughly a 7% change in ownership on a net basis in a typical quarter.

Go to Whalewisdom.com and look up your own ticker (or pick one of your choosing).  At the top of ownership data you’ll see net increase or decrease between the two most recent periods (December 2014 to Mar 2015).

There’s a company in Basic Materials, market-cap over $30 billion. The IRO and I have talked about Market Structure Analytics (our proprietary software and algorithms for measuring the composition and price-setting activity behind daily volume).  I checked: Net institutional change period-over-period was 40,000 shares.

Even I, an inveterate student of market mechanics, raised an eyebrow. I went to Google and pulled data for Oct 1, 2014-Mar 31, 2015. The stock traded over a million shares daily and in the period had composite volume topping 163 million shares.

Holy cow. Hidden inside 163 million shares of volume was real ownership-change of a few thousand shares over 130 trading days. They’ve only got 214 million shares out.

“Wait a minute, Quast,” you say.  “You’re looking at this wrong. There’s a lot of musical chairs, people jumping up and sitting down again across those quarters.”

No, that would contradict the ICI data indicating many investors sit on positions. Picture a Rubik’s Cube. (Am I dating myself again?) The multi-colored tiles comprising the puzzle never change.  They just trade places, like your institutional owners. What determines the outcome isn’t fluctuation in tile-count but how tiles are manipulated.

Without Market Structure Analytics, you’re measuring tiles, not what moves them.  Suppose your CEO said, “You’re telling me we traded 163 million shares over two quarters, and the net result of all that movement was 40,000 shares?”

Telling your executives the truth carries a measure of risk, sure. They may challenge you. They’ll ask you questions. The facts about market-function demand a corresponding change in perception and measurement, and you, IR, keep that gate. The alternative is perpetuating a myth. Choose wisely.

Back before we were vacuum-packed like camping rations into aircraft – “we hope you have a pleasant flight” – a lot of airlines went broke.  You leave too much space free and it takes a toll on finance when you’re in the business of moving people around.

Today in the brokerage business, about 30 firms control 90% of volume and half of those are the biggest banks the world has ever seen. The truth is your share-price is set by them.  The supply chain. In the past week 45% of all market volume came from borrowed shares. Indexes trade back and forth with the ETFs tracking them. How that movement nets out at quarter-end is often a random act with no connection to fundamentals.

You’d think the suppliers and the consumers would get together and change the distribution model.  But that’ll never happen so long as the C-suite believes owners set prices. There’s only one constituency capable of changing that: You. The IR profession. It begins with redefining what you tell Management and Boards, so they know the difference between 40,000 and 163 million.

The math doesn’t lie.  But it raises questions deserving answers (which we have—and for which you can get credit!). Ask yourself:  Is an executive team that never asks IR questions better or worse for you – and your value – than one with lots of questions?  Ponder it.

Missing Volume

I’ve made South Dakota jokes – “fly-over state,” “waste of dirt that could have been used making Colorado larger,” etc.  Not again.

It’s but six hours by car from Denver and we love road trips, so we put a junket to Mount Rushmore on the calendar. Turns out there’s more to the “under God people rule” state than chiseled presidents. In Custer State Park (where never is heard a discouraging Ranger word) this fella ambled by while his brethren were at home on the range below Harney Peak and picturesque Sylvan Lake. Loved it. We’ll go back.

Speaking of gone, wither volumes? And should you worry?

A client yesterday asked about splitting the stock. Share volume is tepid, off nearly 75% since 2009, though dollar-volume (more important to us) is down less, about 40%. Should they do something to stimulate it, they wondered?

Weak volumes would seem cause for concern. It suggests a lack of consuming. It’s happening more on the NYSE than the NASDAQ.   In 2009, the NYSE averaged 2.6 billion shares daily, about $82 billion of dollar-flow. In 2014 so far, it’s 1.02 billion shares, about $40 billion daily.  The NASDAQ in 2009 saw about 2.5 billion shares and $60 billion daily compared to 2.0 billion shares and about $73 billion in 2014.

The big companies are concentrated on the NYSE, which has about 70% of total market cap.  Money is trading smaller companies, but not owning them, evidenced this year at least by sustained volumes for small-caps but weakness in the Russell 2000, down almost 2% this year with the S&P 500 up 7.5%.  Plus, shorting – renting – is rampant, with 44% of daily market volume the past 20 days, nearly half of trades, from borrowed shares.

Check the Pink Sheets and it’s stark. Volume is averaging about 14 billion shares daily in penny stocks in 2014, compared to about 2.3 billion shares daily in 2009.  Dollar volumes are small but have doubled in that time to $1 billion daily. KCG Holdings as a market-maker does over a 1.2 billion shares a day by itself in penny stocks.

And derivatives volumes have jumped since 2009. Global futures and options trading according to the Futures Industry Association totaled 21.6 billion contracts in 2013, up from 17.7 billion in 2009. More telling is where. In 2009, equity and equity-index derivatives volume was 12 billion contracts, identical to 2013. But energy, currency and metals derivatives trading has exploded, jumping 125% to 5.3 billion contracts in 2013.

The answer to where equity volumes have gone is into trading small caps and penny stocks and derivatives tied to energy, currencies and metals. Investors are searching for short-term differentiation and safety from uncertain asset values affected by massive currency infusions from central banks.

What’s it mean to you in the IR chair? Volume doesn’t define value. Witness Berkshire Hathaway Class A units trading 250 shares daily (about $47m). What matters is who drives it. Don’t give in to arguments for “more liquidity.” You’ll help short-term money, not long-term holders. We don’t think splitting your stock today improves liquidity or appeal to the money that matters.

Speaking of rational money, it averaged 14.5% of total equity volume the past 20 days. Tepid.  Where are active investors? Watching warily, apparently. What drives equity values right now is asset-allocation – the “have to” money that buys the equity class because the model says to.

And meanwhile that money is offsetting risk with derivatives in currencies, energies and metals. Take care not to draw the wrong conclusion about the value of your shares. It’s tied to things way beyond fundamentals at the moment.

Enlist Investors

We assume investors know how markets work. What if they don’t?

Patrick Armstrong, new president of the Securities Traders Association of New York (STANY), told Traders Magazine yesterday that the buyside has been absent from the market-structure debate.

What debate? If you joined the IR profession in the past 15 years, you may be unaware that stocks today trade radically unlike any other time in the general history of capital markets. It’s not a technology question. Things change. Machines convert human processes to automated ones. That’s normal.

When steamboats flourished on the Mississippi River, what had been hard – rowing upstream – became an easy ride. Travel took on an aspect of leisure. It moved from essential to enjoyable (air travel has gone the other way, as I was reminded yet again flying yesterday from Denver to Newark). It was still travel, though.

What’s the purpose behind trading stocks today? Don’t listen to what somebody tells you. Look at the data – which you do if you use Market Structure Analytics. The data say that the purpose of trading markets is to move things around for profit. That’s 85% of your volume.

If the exchange listing your shares had told you that the fees you pay would give you access to a bunch of short-term traders moving your shares around so the exchange could profit on data revenues, would it have changed your view of the market?

“I want [the buyside] to tell me their opinion on the direction of our market structure. I believe that those who are for the status quo, those who say everything is fine, are the ones to be wary of,” Armstrong said. (more…)

Maker-Taker’s Mark

Is it diluted?

That’s what everybody wants to know about the market. Are gains for broad equity measures, seemingly epic like my skiing Saturday at Copper Mountain, real or watered down?

That’s actually not our story this week. But we’re so fascinated by what market structure shows that if you huddle in here we’ll share observations. The dollar declined when Japanese Prime Minister Abe said Monday that either the Bank of Japan creates inflation or the government will rewrite its charter. That means more currency devaluations for everyone (if your money buys less tomorrow than it did today, that’s a devaluation whether called one or not).

So stocks rose yesterday. Also helping stocks, money was hedging at options-expirations Feb 15. When investors hedge they tend to invest more funds. Sentiment is okay, too, finishing last week at 5.38 (on a 10-pt scale), up from 5.05 to start the week. Yesterday it was down to 4.71, by far the lowest level all year.

All over, short volumes are down compared to long volumes. That’s a loaded message. Higher short volumes mean more competitive markets. But lower short volumes also mean demand for wholesale short positions is down and shorts are covering. Which is good.

Talk about mixed messages! Investors want stocks to rise but are wary. Lower overall short-interest (bullish) and some short-covering (bullish) also means money is less prepared for the unexpected, and that markets aren’t as competitive as they should be when prices are rising. Pray for no surprises or we’ll have a monumental down day.

Which brings us to our story. Beam, Inc., distiller of Maker’s Mark, said last week that to stretch its oak-aged bourbon it would cut the alcohol content. Drinkers recoiled in horror and disgust. They’d rather do without than do with less for the same price. Beam backed down. (more…)

Clouds and Wind Without Rain

We’re in glorious Cincinnati where the land is rushing headlong into spring. Even a photo snapped in haste northward at night from Covington at the John Roebling Bridge seems cast in ethereal light.

Speaking of rushing headlong, if you’re here in the heartland, join us at the noon NIRI Tri-State chapter meeting today. We’ll talk about what’s got markets hasting.

There’s a saying from the bible: “Like clouds and wind without rain is a man who boasts of a gift he does not give.”

It made me think of volume. Enough of you have written asking about what may underlie declines in market volume that it deserves a community answer. We hope ours will do.

In 1980, Wilshire Associates was tracking about 3,500 publicly traded companies in its index that would become the Wilshire 5000, the category-leading total-market index. The Dow Jones Industrial Average closed that year at 963. Average daily trading volume was 45 million shares on the NYSE.

By 1990, the Wilshire 5000 had over 5,000 companies as IPOs outpaced consolidation. Average daily volume across the NYSE, Nasdaq and American Stock Exchange was 302 million shares, and the Dow Jones Index closed at 2,633.

In 2000, total companies had slipped from the 1998 zenith of 7,460. But daily volume had mushroomed to 2.8 billion shares. The Dow concluded Y2K at 10,786.

Volume built to helium-laughter level of about 7 billion shares daily in 2009. But in 2012 so far, markets are averaging 3.6 billion shares daily. The Dow is up. But the number of public companies is down. Way down. Care to guess how many make up the Wilshire 5000 in 2012? (more…)

The Ides of March today carries an air of foreboding that dates to Julius Caesar’s demise in 44 BC. Before Brutus colored the day red, Romans did on the Ides what any other urbane culture might: They feted Mars, god of war. It feels lately like Mars has been trudging along the tectonic plates.

We still have $200 here for the first person to correctly answer last week’s two critical IR questions: Where do your shares trade? Which brokers trade them?

Speaking of the Issuer Data Initiative: Thank you, NIRI CEO Jeff Morgan, for sliding it across your desk today and out via the weekly NIRI email (note: Register for NIRI National by Friday for the early bird discount). Public companies, please commit your support so every IRO will have answers to the questions above.

Reading Dick Johnson’s noteworthy blog about Warren Buffett’s view of IR prompted a way to show why good issuer data matters. Berkshire Hathaway Class A shares (BRK.A) trade about 500 shares daily, over about the same number of trades per day. On rare occasions, a trade occurs off the NYSE, but most times if Mr. Buffett wants to know which brokers executed trades, that information is available because the trades occurred at his listing exchange. (more…)