Sign in     Like us on Facebook Follow us on Twitter Watch us on YouTube

News and Blog

Join 5000 other sharemarket traders for regular blog updates!

News and Blog

Browse to a category

Blog Search

Azeez Mustapha kindly helps us promote this blog. Click here for more information.

Recent Articles

Even when they’re profitable every day, high-frequency traders aren’t making much money

Virtu Financial—one of the world’s largest computerized trading firms—made money every trading day last quarter. The problem is that it made less of it than in the past, as volatility in the financial markets has dried up in recent months. Big price swings are good for high-frequency trading strategies, as machines can swoop in and take advantage of market shifts.

While many high-frequency trading shops are secretive about their results and plans, Virtu is listed in New York, so its required updates provide a view into the state of the industry. The company’s profit from trading fell in just about every category last quarter, with net income from currencies and commodities taking the biggest hit, each declining some 30% versus the same quarter last year. The company’s share price fell by 8% in early trading.

More here – Quartz

Road To Nowhere

It has been awhile since blog central  had a look at the All Ords and its staggering lack of ability to go anywhere. The full extent of the rubbish nature of the local market at present can be seen below when the performance is compared to the S&P 500 and NASDAQ 100.

performance

This lack of movement becomes more apparent when we chart price movement on a weekly basis.

Ords Weekly

The current consolidation sits within a much broader malaise that saw the market fail to puncture 6000 earlier in the year.

Ords Daily

From a trading perspective there is very little on offer when the index is simply drifting sideways. However, there is always a silver lining to these things in that the longer this compression continues the more interesting the breakout will be.

Old School Cool

Cool-Pics-081217-003

Odd Thing of The Day – Alice Cooper Talks About Glen Campbell

 


 

Fund Manager Scorecard

Each year Standard and Poors produce a scorecard of the performance of a regions fund managers against their comparison indices. You can find the raw scorecards here.

I decided to download the one for Australia and tidy up the data a little so it was more presentable. The chart below looks at the number of funds in various categories that have failed to match or beat their benchmark over a 1, 3, 5, and 10 year period. Just a reminder this table shows the number under performing, not the number that beat the index.

Capture
As you would expect this is one of those – I think I have seen this movie before type of scenarios. The majority of fund managers failed to match the index in all categories over all time frames. I had a quick glance at the scorecards for the other regions and this pattern repeats itself in all regions. The reasoning for this I think is that all managers are captive to the same narrative fallacies and are caught in the same academic, philosophical and psychological delusion. It is not that markets cannot be beaten because there are clearly well known managers who have beaten their index year after year. But if you based your investment strategy on notions such as the Efficient Market Hypothesis, perceptions that you know the value of  something and plain stupid ideas such as we dont need stops because we are smart and would never buy a company that went down. Then you deserve to made to look like an idiot.

However, there is a wider implication and that is the impact that this sort of massive non performance has on issues such as retirement. As I have said before part of the looming retirement crisis could be solved simply by nationalising all superannuation funds and placing everyone in an index fund. Overnight long term returns would double and fees would be more than halved. But there is also another impact and this one in related to the impact of on performance on the broader confidence in market participants. Is it any wonder that Australians opt for real estate as the prime mechanism of passive wealth creation when they hear about this sort of rip off.

Wish I had thought of this list

Note to self – be more succinct….

image001

Want to Own the Most Beautiful V12 on the Planet? Buy This Car

800x-1

Click the pic…..

General Advice Warning

The Trading Game Pty Ltd (ACN: 099 576 253) is an AFSL holder (Licence no: 468163). This information is correct at the time of publishing and may not be reproduced without formal permission. It is of a general nature and does not take into account your objectives, financial situation or needs. Before acting on any of the information you should consider its appropriateness, having regard to your own objectives, financial situation and needs.