Tuesday, April 24, 2012

Duped


Markets set up participants by producing apparently recognizable patterns only to then present a completely different form and outcome.  The ability to fool investors and traders into profound directional gaffs is repeated without fail with slightly altered timing.  Dupes are always being created by chance and necessity.  

Corporations need dupes such as analysts in order to game earnings reports. The analyst's motto should be, "never have so many been so surprised."  

Business news programs with their constant blabbing help shape amateurish perceptions of cause and effect. Notions of market prowess are always be attributed to market participants in hedge and high frequency trading communities contrary to their less than stellar performances. The reality is high frequency trading is not driven by a sophistication of analysis but by an abject fear of risk.  In the end, the capacity for both speed and returns is finite.