mhspring

Market Skepticism About BofA / Merrill Deal

I have no particular insight into whether the BAC-MER merger will succeed but I do know that the pararagraph "The market responded to this deal with as stunning a vote of no confidence as you will ever see. Inquiring minds are asking for proof. It comes in the form of 10 minute charts." illustrates the central problem with our current financial environment. Our problem is the instant judgement of day traders whose time horizon is measured in milliseconds is taken as long term investment advice. It will take a few years to see whether the merger has or has not worked . The value of the stock then will reflect its success or failure. The 10-minute price chart of the stocks on the first trading day after the merger is announced is relevant only to someone with a correspondingly short time horizon.