Downside Risk, page-50

Hey Rolla,

When I was a young investor, maybe a hundred years ago,a share was a big piece of thick paper with various stamps and signatures.
To sell it I had to go to the bank and get it out of the security box and then send it registered post to my stock broker who arranged to sell it, his expensive legal back room then organised an exchange of documents where various documents were signed an stamped including one sent to treasury with the stamp duty applicable. A cheque would then be posted registered post and be brought out to the farm with the monthly mail delivery. After signing for the mail I would unhitch the draught horse from the plough, kiss the wife and kids and ride to town. Realising it was another bank holiday I would take the cheque to the pub who would cash the cheque for beer and room for the night. Riding home the next morning I would inevitably discover various IOU’s in my pocket for stabling the horse and other unmentionable extras. If you had a few thousand shares you would need to pay for an armoured car and go to the big smoke to make sure things were done properly. Do you remember the added costs if the only accomodation was around the Cross. The term Penny Dreadfull was used to describe shares where the sale costs could be more than the value of the shares.

We have moved on, however some old fashioned exchanges still have rules about minimum share value for listing. Apart from a possible duel listing in one of these bourse there is no logical reason for consolidation.

In my experience, over one hundred years as I said previously, you have to have a long memory to remember when a share holder received an advantage from a consolidation. Ditto for duel listings over time.

So lets just ignore these very old men, mostly I would think, who have not kept up with modern inventions like horseless carriages, electric lights and computerised stock trading where the number of zeros in the number of shares on sale makes no difference to the costs of the sale.

Everything that can possibly be said on the disasters that can occur from consolidation has been aired a million times on these threads. They are just to old and have stopped learning from recent history.

MMM