Kemo, I also saw that discussion re day traders with their ultra fast computers; they are only interested in the characters (e.g. SLI) that represent a stock that is either going up or down among the thousands their computer is following. The trader doesn't’t have any idea who the CEO is or what the company does; they make hundreds of bets per day.

The problem, the moderator explained is that these trades add no value to the market, they only take away.

We have discussed how difficult it is to control shorting and the net effect of both of these practices is to take money out of the market. Gold stocks, in particular are not keeping pace with the price of gold. Disillusion with the market for the above reasons are an important consideration; for example the dividends from Barrick gold have been increased but are still only 1.1% (0.12 for a stock price of around $47.00). Thus the exchange traded gold fund (GLD) is cheap to purchase and is more directly related to the daily gold price, and gold stocks give a poor dividend compared to other securities, so if a person thinks gold is too high he will go elsewhere.

This has some importance to us if there is a cash + stock swap.

I was musing that if regulations can’t control the problem, perhaps governments that like to collect money could make an inroad. In the USA, stocks that are held for over a year are taxed at a much lower rate than tax on short term capital gains, so the mechanism is already in place.

Now, since shorting and day trading in this manner are counterproductive to the economy, greaser proposes that:

Capital gains and losses that occur over one half hour are taxed @ 90% and if the trading is between one half to one hour one hour........... @88% and if between one hour to four hours .......then the rate is 86% and from four to eight hours the rate drops to 86%

Then if over one day and less than three days @ 82% etc. etc.

Perhaps under this system, you are not telling them it is illegal and putting them out of work but that it is just less rewarding. Probably then these day traders would get other work and utilize their math skills in a more constructive way.

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