Salient to Investors: Jeff Reeves of InvestorPlace.com writes: Manipulating the markets with high-frequency trading is extremely complicated, hard to track, and even harder to determine violations of laws or regulations. Half of all trading volume in US equity markets supposedly involves high-frequency trading (HFT), which is now a global concern.
READ MORE... →Salient to Investors: Michael Lewis said: Charles Munger says high-frequency trading is the functional equivalent of letting a lot of rats into a granary. Electronic trading has rigged the market against ordinary investors, particularly in America, by allowing high-frequency traders to front run institutional investors and skim billions of dollars from the
READ MORE... →Salient to Investors: Robert Battalio at Notre Dame said: Dark pools have existed forever: shut them down and new forms will arise elsewhere because money managers are too fond of them. Order flow will always have multiple venues to execute on because one size does not fit all. Brokers favor
READ MORE... →Salient to Investors: Barry Ritholtz cites his trading mistakes early in his career: Optimism Bias. After the costs incurred, expenses, taxes paid, time and labor invested, most of the time, it is not worth the effort to beat the market. Most traders won’t go on to become Paul Tudor Jones
READ MORE... →Salient to Investors: Top investing myths: Buy and hold forever. Better to buy and protect as companies and economies change. Have an exit plan to guard against catastrophic loss. Only performance matters. Let you investment objectives guide your investment selection and diversity. Charts are for traders. Charts are important tools
READ MORE... →Salient to Investors: Gregg Berman at the SEC’s Office of Analytics and Research said most mini-flash stock crashes are not the result of broken software but human errors like entering the wrong number of shares or some other typographical error, or incorrectly entering limit orders – these errors can be fixed
READ MORE... →Salient to Investors: Jack Schwager writes: As long as no one cares about it, there is no trend. All markets look liquid during the bubble but illiquidity after the bubble ends matters more. Markets tend to overdiscount the uncertainty related to identified risks and underdiscount risks not yet identified. Low-quality
READ MORE... →Salient to Investors: Paul Tudor Jones at Tudor Investment apologized for saying that women cannot compete with men as macro traders after having children, that you will never see as many great women investors or traders as men, and women often turn their focus to raising children at a crucial time
READ MORE... →Salient to Investors: Tim McAleenan Jr. writes: The Pareto Principle, also called the 80/20 Rule, states that 80% of the results come from 20% of the actors. Melanie Pinola at Lifehacker says 90% of Warren Buffett’s success at Berkshire Hathaway can be attributed to less than a dozen decisions. This
READ MORE... →Salient to Investors: Hedge funds using debt-trading strategies are expanding at a record pace as they profit from risks big banks are no longer taking. Roy Smith at NYU said regulators in the US and Europe want to transfer risk to the shadow-banking system and interferes capabilities of the large banks
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