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What Ever Happened to Long Term Investing?

Started by HawgWild, December 07, 2015, 04:26:48 pm

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HawgWild

December 07, 2015, 04:26:48 pm
I read an article that said the average share is held for 24 seconds due to the prevalence of high frequency trading. This is a great environment for day traders but what about someone in it for the long haul? Seems like stock pps is moving more on fear than fundamentals.

Arkansasbeaux

December 08, 2015, 04:36:07 pm #1
People want instant gratification these days. The lack of patience is actually quite astounding. People also have a lot more access in terms of online brokerage accounts. They also have access to a lot more research and opinions, but that doesn't mean the research or opinions are any good. There's a reason that the average investor severely underperformed the market as a whole, and it has a lot to do with emotions rather than logic. I'm lucky to be at a point now where if I don't want to take on a new client because they are impatient or overly emotional towards their investing, I can refer them elsewhere.
 

ErieHog

December 08, 2015, 06:30:55 pm #2
Some of it should probably be attributed to mathematics, though.   The speed of trade has only gotten faster, and the level of customization and responsiveness, only greater.

I'd be interested in revisiting this in another 10 years, and see if its leveled off a bit, as there is a curve of efficiency involved.
No cause, ever, in the history of all mankind, has produced more cold-blooded tyrants, more slaughtered innocents, and more orphans than socialism with power. It surpassed, exponentially, all other systems of production in turning out the dead. The bodies are all around us. And here is the problem: No one talks about them. No one honors them. No one does penance for them. No one has committed suicide for having been an apologist for those who did this to them. No one pays for them. No one is hunted down to account for them. It is exactly what Solzhenitsyn foresaw in The Gulag Archipelago: "No, no one would have to answer. No one would be looked into." Until that happens, there is no "after socialism."

Old Tusk

December 09, 2015, 12:10:20 pm #3
The time was that investors just went through business cycles. With the FEDs monetary policies, you have to survive huge bubbles bursting. This tends to turn people into day traders.
The Democrats are the party that says government can make you richer, smarter, taller and get the crabgrass out of our lawn. Republicans are the party that says government doesn't work, and then they get elected and prove it....P.J. O'Rourke

HawgWild

December 09, 2015, 12:17:29 pm #4
"Morgan Stanley (NYSE: MS) will take a severance charge of about $150 million in the fourth quarter as the company pares back its fixed-income trading business to improve profitability. The charge will cover the cost of cutting 1,200 workers worldwide, including about 470 traders and salespeople in its fixed-income and commodities business, according to a person briefed on the matter. That amounts to 25 percent of Morgan Stanley's fixed-income trading staff, with other reductions coming in infrastructure and support roles, said the person, who asked not to be identified because the figures aren't public."

10 years from now it'll be 99% algorithmic trading.

HotlantaHog

December 09, 2015, 01:26:42 pm #5
I don't think the number of day traders is particularly high. The volume and speed is all about high frequency trading done by machines. In 1999 or early 2000, everyone and his brother wanted to trade little known Nasdaq stocks no one had heard up because they would go up 50% in a day. It was a total Tulip frenzy. But those days are long over, and I have seen nothing to suggest there has been a big increase in day trading.

A lot of folks are long term investors and may hold onto a stock for years and years. I have stocks that I bought in 2009. There are folks in Atlanta who have owned Coke or Home Depot for decades. But they don't account for much trading.

ErieHog

December 09, 2015, 01:36:32 pm #6
Quote from: HawgWild on December 09, 2015, 12:17:29 pm
"Morgan Stanley (NYSE: MS) will take a severance charge of about $150 million in the fourth quarter as the company pares back its fixed-income trading business to improve profitability. The charge will cover the cost of cutting 1,200 workers worldwide, including about 470 traders and salespeople in its fixed-income and commodities business, according to a person briefed on the matter. That amounts to 25 percent of Morgan Stanley's fixed-income trading staff, with other reductions coming in infrastructure and support roles, said the person, who asked not to be identified because the figures aren't public."

10 years from now it'll be 99% algorithmic trading.

I doubt it will take that long, to reach 99%.    24 seconds is forever, given the volume of trading.
No cause, ever, in the history of all mankind, has produced more cold-blooded tyrants, more slaughtered innocents, and more orphans than socialism with power. It surpassed, exponentially, all other systems of production in turning out the dead. The bodies are all around us. And here is the problem: No one talks about them. No one honors them. No one does penance for them. No one has committed suicide for having been an apologist for those who did this to them. No one pays for them. No one is hunted down to account for them. It is exactly what Solzhenitsyn foresaw in The Gulag Archipelago: "No, no one would have to answer. No one would be looked into." Until that happens, there is no "after socialism."
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