Murray Stahl Episode 24: Exchanges versus indices
from Investing Odyssey Hosted by Drew Goldman
A June 22, 2005 Contrarian Research Report from Horizon Research Group (research staff including Murray Stahl). From Exchanges Versus Indices: as indexing spreads, the report asks whether owning stock exchanges is a superior form of indexation. Using NYSE seat prices back to 1868, it shows that returns depend on the starting point and on lease income: a seat bought in 1986, with its rent reinvested, would have compounded at about 15.82% a year against 12.97% for the S&P 500. Exchanges are near monopolies with mostly fixed costs, and NYSE volume grew 15% a year from 1960 to 2004 while listings grew 2%. As long as activity keeps rising, exchange earnings should grow faster than any operating company's. Part of Stahl, From the Start, short explanations of Murray Stahl's early writings. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit investingodyssey.substack.com
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