Insider Trading is Not the Problem....BUT ETF’s Will Be!

John Carney now at CNBC.com has a story up on Insider Trading…’Does Silicon Valley have an Insider Trading Problem‘

Great headline. John is a MASTER.

The proper title is ‘How the fuck are all these young kids on Stocktwits following trends and price movement and learning fast from mentoring to legally make money in the stock market’. That luckily will never be a headline anywhere.

I am not going to go into the very simple and basic requests FINRA and the SEC could implement on social networks to level the playing field, because I see companies (some that I will and have invested in) solve this problem in the free market way.

I will say that letting companies get public before they should be public ( or RE-public as Paul Kedrosky correctly terms it) because the IPO and Sarbanes laws are so f@#$%ked up and being public is so expensive, is here to stay. A healthy IPO market will only heat this PRE-public to RE-Public trend up further.

The problem is actually the bullshit hype that ETF’s have the illusion of diversification and low cost. They do until they don’t and they WON’T. I just can’t tell you when. A liquidity crisis will bring all this back to the forefront as it always does. With the government pouring money into the system, it is just dumb to predict when.

MORE pople need to own pieces of COMPANIES again, not ETF’s as lazy proxies. MORE people need to use the social networks to surface the intense signal that is freely available now from AngelList to TechMeme to Linked in, Stocktwits, an all-time high stream and Twitter.

Insider trading is unstoppable. People want to cheat. Rich people, poor people. Fuck them. Jesus has a better plan for those cheaters than anyone you and I have ever read or heard from. In the meantime, punish the abusers and shame them. Enforce the basic laws that actually exist today.