TED Conversations

Rohan Hafeez

Volunteer, United Nations

This conversation is closed.

Stock Exchange - That let's you trade people!

I have an idea of a company (an exchange - sort of) to trade & invest in professional investors. So is it the same as investing in an investment firm listed on the exchange? - No. Here's the reason.

A lot of people give their hard earned savings to investment firms or individual investors to manage their assets. This is a good thing because if people are to try and invest themselves they are bound to fail in today's specialized field of investment. Hence handing your savings over to professionals does reduce your risk but not to an extent that'll push people to get their dormant savings out of accounts and into the hands of professionals. This trust got even more battered after the 08 recession... So if people can't handle it themselves nor can hand it over to professionals then?

The underlying problem here is not that people don't have a clue about today's investment field but that people are not provided the best professionals. Don't expect Joe the plumber to have a grasp of futures or options in-fact don't expect that from Veronica the surgeon either. It is not their job to understand such things. So is there a method to provide them best professionals - Yes.

Here it is - have you ever heard that price mechanism (capitalism) ensures that the efficient get the most. Why not apply the same concept on the people that invented it in the first place! Just imagine:

An exchange that lists group of individual investment professionals. Their shares (not the conventional shares but bears resemblance to common stocks) priced according to the profits they are raking in. The one's raking in the most profit get ahead and to the top the one's that can't compete are going to head in the other direction. People through price (and other data) can get a clue about in which group to invest in A, B, or C to get maximum, risk reduced yields.

  • thumb
    Jan 24 2014: What came to my mind while reading your views on investment firms was this beautiful conclusion I once heard:

    If your investment banker is as good as he/she claims, why then is he/she still working?