Part 4/8:
- Standard Trading Units: The notion of "board lots," which refers to a standardized trading order typically set at 100 shares, was also discussed. A lower stock price may facilitate easier accumulation of shares in multiples of 100, reducing odd lots that can complicate trading.
Decline in Stock Splits
Interestingly, the frequency of stock splits has declined over the years. According to data presented during the episode, only twelve S&P 500 companies on average executed stock splits annually between 2008 and 2013, a stark contrast to the 64 splits per year during the 1990s. O'Reilly and Lewis speculated on several contributing factors to this trend, including:
- The influence of iconic investors like Warren Buffett, who advocates for higher share prices and long-term investing.