Seeking Alpha

Buffett's Business Wire cuts off high-speed traders

  • Warren Buffett and partner Charlie Munger have been loud critics of HFT, but a WSJ article earlier this month reported Berkshire Hathaway's (BRK.A, BRK.B) Business Wire was giving high-speed traders direct access to earnings reports and other market-moving news items.
  • Business Wire's decision to end the practice comes after consultations with The Oracle himself, as well with the NY AG's office. Buffett's involvement is highly unusual as he typically leaves his managers to manage their operations, and limits Omaha's involvement to capital allocation.
  • While direct access isn't illegal, combining it with high-speed algorithms to crunch the data gives HFT traders a fleeting, but lucrative edge.
Comments (3)
  • Access, whether in the form of "inside information", or availability of connection to trading markets (as in HFT), seems to me to be the essence of unfair advantage, the anti-principle of an honest, open platform.
    21 Feb, 10:10 AM Reply Like
  • Ironic that Buffett & Munger have made their fortune by making informed decisions off "available" information. Sure all investors had access to quarterly/annual reports for the last 40+ years but the reality is that it was very expensive (time/effort) to gather this information. And they were rewarded because most investors certainly did not put the effort that they did when seeking investment.

     

    It's a shame he cries foul now only when he isn't able to make use of the information.
    21 Feb, 12:16 PM Reply Like
  • Buffett and Munger ask that we do as they say and not as they've done for the last decade.
    21 Feb, 03:24 PM Reply Like
DJIA (DIA) S&P 500 (SPY)