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"IF I HAVE TO ASK SOMEONE WHAT TIMBER IS WORTH, I'LL NEVER INVEST IN IT. I don't ask the price when I invest in stocks; I look it up in the paper or at my broker's. I always buy an individual stock, so I'm only casually interested in the Dow Jones Average. I'd never buy anything but a specific tract, so I'm only casually interested in the monthly averages you post at each JMV&CO office. If you want me to buy something, show me the details of a tract that you sold and the amounts of the bids on it. I may want you to manage it for me after I get it, but I'll use my own judgment about whether to buy it." We've heard these words in one form or other hundreds of times since 1951. So has Douglas Donnell, VP and National Manager, Bank of America Private Bank. He pointed out in our interview of him (www.vardaman.com/greensheets/donnell.php) that the absence of reliable cost data prohibits investments by the many substantial BofA clients. We do our share to encourage investors and thus to improve timber markets by announcing all bids on JMV&CO sales; we urge all others to do likewise. Failure to do so creates an inefficient market that scares away the affluent crowd and benefits only the select few. The same holds true in other markets. In a full-page ad in The Wall Street Journal of 6/26/00, Archipelago LLC summed up its message as follows: WHAT IF THERE WAS A LAND WITH NO SECRETS? WELL, THAT'S HOW WE THINK THE STOCK MARKET SHOULD BE. BECAUSE HIDDEN INFORMATION HAS BEEN STANDARD PROCEDURE FOR TOO LONG. THAT'S WHY WE'RE CREATING THE NATION'S FIRST TOTALLY OPEN ELECTRONIC STOCK EXCHANGE. EVERYTHING OUT IN THE OPENsmARCHIPELAGOsm There are other good reasons for total openness. Two TWSJ reports this month described the troubles of eBay, the giant Internet auction house, with "shill bids," a term used to describe fraudulent bids intended only to drive up prices. One article points out that eBay's troubles arose because its "profit depends on people trusting the site." The same principle applies everywhere. We don't imply that such tactics are used in the timber market, where we have operated for 50 years; we emphasize, however, that it is impossible when you announce all bids. |
