Pershing Square’s Bill Ackman thinks there should be a database for investors to write in their reasons for buying or shorting a stock.
“A lot of people say that short selling is a bad thing,” said yesterday at the Bloomberg Markets Global Hedge Fund & Investor Summit in New York.
“The frustration is that had people paid more attention to some of the alerts, we could have had much less of a wreckage in the credit crisis.”
His proposal is a research aggregator that is kind of like the SEC’s compilation of company filings. Currently investors are required to file their investments with the SEC if they’ve purchased over 5% of the company’s stock, list their holdings at the end of each quarter, file their performance quarterly, and such – but investors have never been asked to list their reasons for investing or shorting a given stock.
“If we had a mechanism like that, where there’s a much freer exchange of ideas, it would lead to more accurate security prices,” said Ackman.
“It would be a great forum for the SEC to comb through to find companies they should focus their investigations on.”
The forum would also offer a new place for dirty investors to commit fraud and manipulate records.
On that note, check out the worst trades of all time –>