<p>I wonder if FB is now stand for “Foolish Buyers”. :D</p>
<p>“I understand HFT but I still do not understand how they make money. If everyone is running an algo they all cannot be making money. It seems like one algo would wipe out the other algo.”</p>
<p>This does happen. Many trades work for awhile and then they stop working. Firms try to come up with algos to trade against other algos.</p>
<p>These firms make money in many different ways. Arbitrage. Scalping. From order flow. Looking for tendencies. Trading news. Pairs trading.
Baskets.</p>
<p>Sounds like my bookie who gets the vig on all bets, winner,winner, chicken dinner!!!</p>
<p>On HFTs, I see the complaints about them. Maybe they screw things up for others or maybe they add volatility or maybe there’s some amount of envy for how well they do - or at least how well many think that they do.</p>
<p>If I’m making my goals, do I really care about what the HFTs or market makers are doing? We had a hiccup this week. It didn’t affect me at all - I just watched some gyrations and ignored them. There was a lot of shouting and screaming but perhaps that was from short-term traders.</p>
<p>12,000 before 13,500</p>
<p>I think anyone who has owned stocks knows that they can go down as well as up, but the downs in 200-2002 and 2008-2009 were so extreme that some people were scared away, never to return…and others tiptoed back, but get startled at any loud noise. These computer glitches (FB, flash crash, Knight) do not give anyone a feeling of safety.</p>
<p>It definitely makes more sense to invest in community enterprises (“community private equity” so to speak) than stocks. The returns are much higher, you are more individually involved, and it’s more rewarding.</p>
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<p>You would really only have to worry about the flash crash if you had unthinking stop losses. Stop loss conditions should be more complex and monitor the rate of decline. In fact, if you put in stop losses at all, it means you are betting on its perceived value rather than its fundamental value (in which you wouldn’t mind if the stock were momentarily undervalued).</p>
<p>Volumes are terrible, and may never come back…i you invested 10k in 2000 in a S&P 500 fund, you are likely still losing money,12 years later…there is no safe place where you can get a decent return ,risk free…and demographics are working against investors</p>
<p>I was watching the streamer during the flash crash an my inclination was to buy when one of my stocks dropped 75% of its value in a short period of time. Of course I couldn’t get any shares at that price and it came back up quickly. Nutty stuff.</p>
<p>It’s been 12 years of stockpicking and timing. I’d love another secular bull market but the secular bear markets are supposed to last as long. So maybe the animal will turn in 2020.</p>
<p>Fiscal cliff summary.</p>
<p>[Fiscal</a> cliff: What’s really in it? - Aug. 6, 2012](<a href=“Fiscal cliff: What's really in it? - Aug. 6, 2012”>Fiscal cliff: What's really in it? - Aug. 6, 2012)</p>
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<p>What worries me is that nobody, even today, knows what went wrong. I slept through the flash crash–I must have been taking a nap, lol.</p>
<p>$COMPQ fibs</p>
<p><a href=“http://img856.imageshack.us/img856/7351/compq.jpg[/url]”>http://img856.imageshack.us/img856/7351/compq.jpg</a></p>
![http://img856.imageshack.us/img856/7351/compq.jpg[/url]](http://img856.imageshack.us/img856/7351/compq.jpg%5B/url%5D){kind=link}
<p>13200, 3000, 1400.</p>
<p>Wow!</p>
<p>Can’t really see why the indices are doing so well.</p>
<p>12,000 before 13,500</p>
<p>Market finishes lower today,</p>
<p>Russel is up 0.96% while the $indu is +0.58%, $compq +0.81%, $spx up 0.66%.</p>
<p>Judging from my two portfolios (2/3 dividend paying stocks, 1/3 high flying growth stocks)–people are selling stable and buying growth today. By Thursday, it will be reversed, lol…</p>
<p>Elle, now is a good time to jump into CRUS. :rolleyes: ok, maybe, I’ll eat my “rolled-eyes face” when it shoots straight up to $60.</p>
<p>Regarding the battle between HAL 9000 and human beings in short-term trading, Manoj Narang, CEO of Tradeworx said at Fast Money today:</p>
<p>The place Jack Bogle and I agree is that human beings should not be involved in short-term trading. Human beings should be involved in long-term investing and thats a realm where computerized decision-making made no inroads whatsoever </p>
<p> algorithms are just much, much better at trading for the short-term than humans are. They are much better at assimilating tons of information very, very quickly, reacting to it quickly and those are the skills that are necessary to trade on a short-term basis.</p>
<p>“Human beings should be involved in long-term investing and that’s a realm where computerized decision-making made no inroads whatsoever…’”</p>
<p>While not quite true, you can be long term ,and the machines can crush your holdings at ANY time,short or long term</p>
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<p>PVX was $2 a share a few years ago with a 33% dividend yield. That would have been pretty hard to crush.</p>
<p>I think if you are investing long term…these short term gyrations don’t matter.</p>
<p>Look at the short term issues the markets have had…</p>
<p>1987 crash…
1989 mini crash
Long Term Capital blow up
Mexican and Russian currency blow ups.</p>
<p>The Flash crash…the stock market is much higher than it was during the flash crash.</p>
<p>The Knight trading fiasco last week… Big deal. ;)</p>
<p>If the markets sell off because of a computer glitch or some short term problem…the market looks like a buy to me.</p>