Friday, March 13, 2015

Investors Should Fear Subjectivity

News
While markets can be pushed against secular trends over the very short-term, thus, fulfilling some aspect of human behavior that points the finger at others rather than admit shortcomings or lack of understanding, they're not rigged. Capital flows and intermarket trends, the domain of computer analysis rather than emotion, show far too much depth and order to be controlled by any one group. The invisible hand, the sum of all individuals acting in their own self interests, cannot be controlled. If it could be, propaganda alone would prevent economic, political, and social change.

Investment strategies corrupted by subjectivity rather than objectivity generally end in failure, so please be careful.

Headline: Michael Lewis: 'Flash Boys' market still 'rigged'

A year after his "Flash Boys" book rocked Wall Street, Michael Lewis thinks the stock market is still rigged.

Last March, the author ignited a prolonged, heated dedbate about high-frequency trading, which uses sophisticated computer algorithms to execute orders in fractions of a second. Lewis profiled Brad Katsuyama and IEG, which developed a system that seeks to level the playing field for investors.

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