Individual "VALUE INVESTORS" Being Marginalized By Computer HFT'ing

[Guest ValueCarl]

Remember Mr. MGOO's INSIDE SCOOP! "This is NOT your father's STOCK MARKET!" imo

 

 

In conclusion, continuing advances in computerized

trading pose challenges for regulators throughout the

world—and leave individual investors marginalized.

Regulators will have to take into account the ability of high-

frequency traders to play global regulatory arbitrage in

microseconds. Regulators should not only seek to assure

that markets are able to continue to function under stress,

but they also need to devise remedial actions that protect

individual investors who have fundamentally different

objectives from the high-turnover objectives of high-

frequency traders and computerized algorithms.

 

https://docs.google.com/viewer?url=http://www.international-economy.com/TIE_Su10_MalmgrenStys.pdf

 

 

 

[Guest ValueCarl]

I have a significantly better suggestion, having proposed it for many years x many different venues.

 

Shut all the quote systems down except for buyer and sellers to meet on a quarterly basis, after a financial report has been filed, and a "VALUE ARBITRATOR" pegs prices according to a "DEFINED" set of "RULES" resulting from said reports. That "Arbitrator" or "Ombudsman"  should stem from the "Accounting Industry."

 

Think of ALL the CRIMINAL OPERATORS society could rid themselves of from WRONG STREET and its ugly tentacles, should such a system be adopted. Some of those scoundrels might be forced to finally go and do something PRODUCTIVE with their useless lives of cheating, stealing and lying!

 

Who would benefit from such a system except for those "investors" with "longer time horizons" willing to hold their shares until business prospects meet their stated goals, or impatience PERSISTS and they sell at LESS than DESIRED PRICES! Of course, part of the ground rules for any "investor" would be that, no buying or selling except on a "FIXED DAY" based upon quarterly results relative to "FIXED PRICES" after "RESULTS" are KNOWN! 

 

In my system, the "accounting firms" would derive the "fees" for arranging that buyers and sellers meet on each day of "RECKONING."

 

What a nice dream for bringing breaths of fresh air to such a criminal, manipulated system of "Liars Poker." imo

 

 

 

Some commentators have suggested introduction of minimum

holding periods for non–broker-dealers. Alteration of incen-

tives might be achieved by introduction of a sliding scale

of fees or taxes according to volume and speed of trading. 

[Guest ValueCarl]

Technology may now have overridden such investment

concepts. High-frequency trading platforms are focused

solely on ramping up speed and volume so as to maximize

tiny gains per transaction. Computerized algorithms that are

momentum-sensitive are increasingly high-frequency trad-

ing-driven, raising serious doubts about traditional concepts

of how markets should work. Investment strategies based

on fundamentals such as a company’s long-term perfor-

mance have been swept aside by high-frequency trading

algorithms hunting for inefficiencies in daily pricing and

super arbitrage opportunities. In so doing, they open

investors to a new form of risk that has not been accounted

for in most “buy and hold” asset allocation models.

In effect, individual traders are confronted with over-

whelming momentum-driven forces that are unrelated to

performance of individual businesses. A “fair price” may

exist, but high-frequency traders are not seeking fair

prices—they are focused solely on immediate profit. They

are seeking transaction volume boosted by any form of

momentum they can generate. Unfortunately, high-

frequency trader interaction with computerized algorithms of

large-cap financial institutions is providing opportunities for

high-speed, virtually undetectable market manipulation.

Where there is opportunity to “shape” the market for advan-

tage, it is likely that such opportunity will be exploited.

[mountboney]

What's the big deal.  If Mr. Market on steroids is even more irrational then so much the better.

[Guest ValueCarl]

If you believe trading against a computer being programmed by, let's say, Goldman Sachs, is no "big deal" all while supply/demand factors are ignored, and when computers go WRY in cases of "FLASH CRASHES", with more spectacular irrational prices being "ELIMINATED," keep having a go at such a "FIXED GAME."

 

"FREE MARKETS" have been denigrated to where my musical fruit originates from!

 

Assuming one did enact something along the lines of my suggestion(quarterly pegging for buyers and sellers to meet), the market would be significantly more "EFFICIENT." Then, those economics professors X the land would gain more respect from men like Buffett, Watsa, etal.

 

I would venture to say that if markets operated more along those lines, someone like Warren E. Buffett would never have been heard about.

 

I would also speculate that he might be a great proponent of something like this today, after CLEANING HOUSE from IMBECILES as well as CRIMINALS for so many decades.   

[Guest HarryLong]

If you believe trading against a computer being programmed by, let's say, Goldman Sachs, is no "big deal" all while supply/demand factors are ignored, and when computers go WRY in cases of "FLASH CRASHES", with more spectacular irrational prices being "ELIMINATED," keep having a go at such a "FIXED GAME."

 

"FREE MARKETS" have been denigrated to where my musical fruit originates from!

 

Assuming one did enact something along the lines of my suggestion(quarterly pegging for buyers and sellers to meet), the market would be significantly more "EFFICIENT." Then, those economics professors X the land would gain more respect from men like Buffett, Watsa, etal.

 

I would venture to say that if markets operated more along those lines, someone like Warren E. Buffett would never have been heard about.

 

I would also speculate that he might be a great proponent of something like this today, after CLEANING HOUSE from IMBECILES as well as CRIMINALS for so many decades.   

 

"Quarterly pegging" ?!

 

Someone needs to say it, you're off the deep end. Once you say something like suggesting quarterly pegging, no one can take you seriously.

 

You're just going from one extreme to the other.

[Guest HarryLong]

"a "VALUE ARBITRATOR" pegs prices according to a "DEFINED" set of "RULES" resulting from said reports. "

 

Your "reasoning" is just so facile. Of course, it would never occur to you that much a business's value arises from cash flows it may or may not earn in the future. Much of Buffett's work goes into making such estimates. You're not going to mechanically be able to peg a value from a set of rules applied to financial reports.

 

If you believe that, you're a simpleton. And stop whining so much. It's becoming an infectious activity to a few people on this board.

 

But I state the obvious, and perhaps, waste my breath on you.

[Guest HarryLong]

PVD just hit a new 52 week high today. It has a very low price/free cash flow ratio, a low P/E ratio, a strong competitive position, and a good dividend.

 

Oh, I am being so marginalized! Woe unto me?! Why are the computers letting me make so much money?!    ;)

 

Someone needs to lighten you up.

 

Stop whining, do some research, and get to work. Find something good and cheap that no one has ever heard of.