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The Concept of Zero and the Victims of Delisting

The calendar approaches 2013… Years have passed but 400 thousand victims of delisting still turn their back on the market. In short, we are still at a dead end…

As we entera new year,there will be discussions everywhere about what the new year will bring. Actually, it is not the year 2013 but 2012, since there is no year zero in the Gregorian calendar and AD 1 immediately follows BC 1… Some newspapers will inform that the Gregorian calendar was developed by the Italian doctor Aloysius Lilius and was later proposed to Pope Gregory XIII by Lilius’ brother after his death and that the Julian calendar which was introduced by Julius Caesarapproximately 1,500 years ago was replaced by the Gregorian calendar in 1582. The forgotten number zero will make us remember the Indian mathematician Brahmagupta who was the first to use it as a number. Brahmagupta said: “Zero is the result of subtracting a number from itself.” However, a friend of ours, who engages in the same science at one of the largest universities in Turkey as a professor of physics and who is also an investor, uses the concept of zero today when referring to shares of Çukurova Elektrik. Four hundred thousand victims of delisting are no longer in the market… If those who shamelessly accuse these people of being unconscious still dominate this market, the result is really zero. The government has abruptly deposed the Chairman and board of the CMB (Capital Markets Board). If the old board members are to be blamed for the low numbers of investors, the new board members should get a promise from the government about solving this problem. Otherwise, neither the number of investors and companies nor the market itself will be brought to desired levels. Whatever the board does, the market will not develop unless these grievances are removed. Let no one accuse them. The Hypothesis of Morphic Resonance Have you heard about the Hundredth Monkey experiment? On a distant tropical island, scientists have provided monkeys with potatoes dropped in the sand. The monkeys have learned in time to wash the potatoes. Then monkeys on faraway islands have learned to do this much faster than the first group. This experiment has been repeated on mice and many other animals and the hypothesis of morphic resonance was thus born. We have already conducted the same experiment in our country on 400 thousand persons. Today many people who can invest in the stock exchange are scared because the fear spread and the sorrow felt by these victims always hover over the stock exchange… There are still people who pray and believe that the government will recompense them. This being the case, a roadmap about the privatization of the ISE (Istanbul Stock Exchange) comes out. The stock exchange will become an incorporated company. Intermediary institutions and the Association of Intermediary Institutions thatcontributed to the market will have a five-percent share. Why? Because of their contributions… But there is no such contribution. Problems are not solved by giving these 400 thousand victim-investors a small share. And no one speaks up. The key element of the market is ignored. It’s a pity, a real pity… I would like to also mention public offerings, one of the most complained about issues recently. If you do not want to see unsuccessful public offerings, then public offerings through underwriting should start again. Those intermediary institutions shouldering responsibility willconduct proper valuation. As for the issue of valuation, the valuation model based on book value is a relic from the 1940s. In this model, the company does not create new expectations and those values within the company are taken into consideration: land, real property, buildings… Just search how much higher these are valued and how false balance sheets can be prepared. You can find it even now at public companies. If the company in question does not engage in projects mentioned in the prospectus and if these are fictitious projects, investors should file a claim andthe CMB should penalize.  It’s neither the book value, cash flow, nor the balance sheet… It’s the expectations that create value. Those who deceive people with expectations should pay the penalty.