Engineer

The Stock Market Is Not the U.S. Economy

“A third of all U.S. stock trades in 2006 were driven by automatic pro grams, or algorithms, according to Boston-based consulting firm Aite Group LLC. By 2010, that figure will reach 50 per cent, according to Aite.”

www.bloomberg.com/news...

If you’re getting into trading seriously, I think it’s important to understand this. Ironically, these rational proprietary programs (basically more sophisticated investools), helped cause the very irrational crash of ’08, by going into self-reinforcing routines that kept triggering lower and lower stop-loss sell orders, overriding all fundamentals.

It’s fascinating to observe that when the future is supposedly predicted, the very knowledge of the prediction en mass ends up changing the future outcome.

IMO trading is a huge waste of time and effort directed toward something that provides little to no value to society. However, there is opportunity now to pick up bargains while the “masters of the universe” try to figure out what went wrong and reset their code for the next irrational move to the upside.

This Isn't a Bottom, It's a Disturbance in The Force

I vote for Tony Blair as C-3PO.