An sustainable-incentive based stock market

Here’s a “what if” (an idea that makes sense but probably can’t work).

Stock value based on long-range planning and financial health, rather than just short-term profit increase.

It’s currently easy to see the pitfalls of a short view on profit taking in the stock market. Well, the problem for investors not owners at any rate. But how the hell can one raise capital without offering the prospect of profit, for taking the risk?

There may be slightly different proposals one could make regarding a proposed company that has buildings and tools it could sell to recoup something should it fail – as compared with an information service that only has a few desks and now dated computers. But the problem is essentially the same.

As much as I’m beginning to hate the word, sustainable, it does suggest an alternative to a profit-only-based stock market.

Start by asking how one can quantify or measure sustainable, when it comes to a capital system. Because in order to offer a financial reward for sustainability, one must be able to measure it, and award accordingly. The current method is called, Price/Earning, or P/E (I am NOT expert and only barely conversant in this, so be warned). PE is the price of a share of stock divided by the earnings per share. So the lower the number the better.

There are all kinds of “funny” calculations a company can make when it quantifies its earnings – that’s another story for another writer. My point here is:

A. We need a new stock market that will compete with current markets for investors.

B. In order for a company to be listed in this market, it must conform to the following regulations.

1. State its earnings according to a strict formula defined by said market.

2. Not incur debt past its initial offering and any subsequent stock sales.

3. Maintain a savings account sufficient to ride out economic down-turns, as defined by said market.

The name of this stock market?

Market of Sustaining Economies (and I don’t like it)