Patent CA-2619032-A1 (CA)
Title: New stock market innovations
Inventor: VOON GERARD
IPC: G06Q40/04
Filed: 2008-02-22
Abstract: Charting - involves micro price blips and macro trends. The height of difference since preceding peaks, breaking the ceiling is a sign of micro blips and is even more promising when it is on the right hand side (most recent events) of the price/time chart. If the peak doesn't rally very long this maybe a sign of investor profit-taking. If there is much volatility, then there may be many speculators watching this stock. There are different kinds of speculators; followers that are trying to ride the wave; followers that are waiting for a definite sign that a trend has begun; and contrarian investors who push the stock price in the other direction. Some investors don't speculate as much but rather invest on value (current price under or over valued), and growth (expecting payoff). Both investment strategies are based on fundamentals, such as sustainable competitive advantages.   When the price doesn't change for a while and there is high volume, this is indicative of exchange of equal volume of shares between buyers and sellers.   A dip in the price that doesn't last long could be merely a correction after over exuberance of the stock. As prolonged dip in price could be indicative of market sentiment, distrust loss of credibility of management/fundamentals, perception performance uncertainties towards fundamentals of competitive advantages, sometimes even question of a ability to deliver as promised (Bre-X) and/or (financial collapse - unable to cover high gearings such as the subprime mortgage), uncertainty may come from past history of fraud; inability provide reliable performance picture and therefore inability for investors to appraise the value of the company.   Some common risk/reward include past known problems and weaknesses, and whether fundamental competitive advantages are sustainable and able to overcome weaknesses anywhere in the company, sector, industry where any incidence or factor can have a large impact (scenario planning).   Or investors can invest based on performance - income relative invested capital and the capital's changing market price per share (P/E, EPS, ROI).   Given the above we are creating a model that could possibly include a lottery for co-invest in a Mortgage Back-up Fund (especially for investors that want an Ethical Venue).   We appraise the value of the real estate. The defaulting Home Owner can stay and rent (at low cost but with a eviction demand clause when a buyer - at a good price is found) or lease to own the house, until a buyer is found at decent prices, at which time the Home Owner will be moved to another site of similar cost and type of location (depending on which amenities the Home Owner considers most important) or the profit from the sale of the house will be split between the fund investors and the Home Owner. The Investment Fund can raise the risk by taking out a (eg. options contract), to sell at a floor exercise price (the term could depend on when the Investment Fund Manager expects the house market to pick up again or renewable).   The funds investors could be offered a range and/or spectrum of risk, and by into different number of shares at different risk levels.     Next we want to create a Pan African/South - Central American Development Bourse and African/South - Central American Derivatives Board.   We could start by coordinating with other Development Funds. Next we pool knowledgeable local experts on the subject of the supply/demands of local industries (popularity why - what drives popularity eg. affordability and the probable lasting period of high demand trends, what are the challenges of delivering products to the peoples, and their export market - eg. safe goods). These locals together with a few Knowledgeable and able to make a realistic and closest and most accurate market/feasibility/appraisal/cost benefit/viability/multi criteria analysis/benchmarking/PERT/GNATT/financial statements/scenario analysis studies...   The fund can fund and/or co-fund for theses countries (Venture Capital) for local ideas for new innovations/new technologies, we could pool (qualify them first) export marketing consultants (with firm grasp of richer and close importing together with locally product knowledgeable) and organization of logistics for example green and Fair Trade (A  Derivatives Fund could be used to ensure the commodities trade - such as Fair Trade prices).   The Fund could also insure against political and climate risks (the Nation's weaknesses in terms of business impediments).   Strengths of these nations may include minerals deposits, and/or eco-tourism, and/or low cost of labour.   After co-funding the pre-market product development bridge financing, we can offer an Initial Public Offering.     Other Venture styles critical a Nation's early development include:  1. Project Financing 2. Turnkey 3. BOO  4. BOT 5. Infrastructure - Utilities, Transport, Housing 6. Tourism 7. Farming As an Aside:     We could offer ethical funds as well:   We would like to offer people from the rich first world a facilitation to sponsor/befriend and African/Asian/Latin American AIDS/HIV child and/or adult and/or impoverished and/or just handicapped, they would use a video camera and some pictures for the memory.  We could also include the option for the sponsor to see how their money was used.   We plan to contribute part of the profits of the Bourses to help the sick, impoverished, promote Human Rights, Tolerance, Compassion, Mercy, and as major contingency fund for financial crisis and/or currency or inflation crisis.     We could have a West Coast of America Bourse, in synchronized buying and selling between head quarters in Vancouver, Seattle, San Francisco, LA, (these markets could be integrated into the NYSE, NASDAQ and TSX and Hawaii the Hawaiian branch could be Head Quarters could be used to tie Bourses in Asia that want investment; we could offer Traders absolute real time trading by using neural two way electrodes to buy and sell financial instruments as fast as the mind, the broker concentrates signal to (could be a menu) buy or sell, then concentrates (either by tuning control and or exact numbers or uses menu to buy an offer price) then pushes button around his neck to verify/confirm the buy or sell - this technology could be used for day traders and electronic traders as well.   We could offer every major (% subsidized by us) organization who have wealthy (income of net worth) people in their corporate offices ticker tape screens for their areas that the most of their people can commonly or at least regularly view.   We could even create a Virtual Reality (and ability to switch to which option and directly connect via neural two way electrodes), with drop down menus to search a stock by letter by letter alphabetical order and mind electrodes/mind sounds word and (letter and at least key word) recognition (and/or logical language).   We could divide the stock markets (Bourses) into segments. Each Bourse segment depending on their risk exposure, volatility and appraisal of their industry (size as well) in the internal/external buyer demand, could jointly be required to contribute to a insurance in the case of financial/currency and/or inflation crisis.   1. Ranking could be by Brand Name (and staying power likely benchmarked against other Brand Names for the same products in the same industry) - prestige, reliability, trendy. 2. Cost and Quality (Generic).  3. Defence Investments. 4. Speculative Investments - mining, new product development. 5. Value investing (fallen out of favour below price multiples because of irrational sentiment) based on appraisals of fundamentals or overvalued. (PIE, ROI, EPS).    Unless new event drives (not yet known to the investors) Change in price further under/over. 6. Growth (size of market demand, what size can realistically capture given constraints).  If everybody invests their money, they will facilitate businesses to finance their expenses and sell their final products/services to generate higher value (profits - where the demand for the products/services provided is greater in value than the cost). The outcome is that customers are satisfied, money supply increases which further allows the companies to make more profits which increases the individual incomes of employees and investors.  Higher profits can be yielded when profits go towards better (more productive) equipment, better product versions, well chosen low labour markets to increase productivity. On the opposite side of corporate investment/expenses, especially labour, to hire and thus reduce unemployment in their nation of choice (which is also balanced out by demand for higher wages in that country and types of jobs eg. hard labour which the people of that country don't want to do). Ideally it is a good thing for the local economy (and the stock market will react favourably) if unemployment in down (more retail and investment spending and therefore more money supply which gives businesses in the front end and the back end more money to finance their expenses).     The higher the margins/profits the higher the income the more money some if not all the suppliers/buyers down the vertical chain. Where investors/employees profit the result is that a percentage more of the their incomes will either be invested in consumer/retail (to grow the economy).   The two paragraphs just above is why investors should invest rationally and keep investing in reward/risk based on competitive advantages for the highest profits.   Creating a portfolio adjusted based on your beliefs about best strategy, fundamentals and value, growth...   The funny thing about volatile markets and companies which have good fundamentals (sustainable competitive advantage) that are resilient, is that their stock prices may rise then there is a slight correction, but the value and/or vulture and/or private equity funds, will (in general) realize there a potential to be made in companies that are irrationally undervalued.  Like politics, the Private Equity Funds removes past companies' management that people associate with mismanagent, to start a new clean slate, with management known for corporate turnarounds.