How Traders Killed Value Investing

btw, slight sidebar - if you ever look at older stocks through history, check out the floats (and number of shares issued) as compared to today.

 

This article layers a ridiculous conclusion on top of misunderstood observations. What's it advocating, really? Bring back the "good old days" of high fees?

The only area I see in which traders could harm value investing would be in using illegal insider information, which of course is already illegal (and prosecuted, thankfully). And I see no mention of that in this article. And besides, insider trading could be done just as easily by a "value investor" as by a "trader".

Some people think that the Feds pumping billions into a defunct company can magically keep its equity afloat. May be right, may be wrong, I personally wouldn't touch it. And the point is...???

Maybe in the very short term, but short-term traders can't control the long-term. Or have value investors suddenly become very short term? Then that's their own issue, and has nothing to do with traders.

Uhh...NOPE.

The reforms that hurt small investors have nothing to do with trading -- but it has a lot to do with banks and the connected overconsumption at all levels.

Wrong again. The former middlemen were forced into early retirement. And if those heavy-trading hedge funds aren't profitable, they'll be gone, too. Harsh, but that's the reality of a more efficient environment -- unlike the one that the author apparently yearns for, where high fees buffered big firm profits ad infinitum.

Reduce spreads benefit long-term investors. If they buy and hold, they pay a lot less to buy. Or should we be yearning for the days of 1/4 point spreads?

The main job of a sell-side analyst was to generate investment banking revenue, not to provide objective analysis. Hear about many IPO's lately? Do the math...

 

So I write calls on my long term portfolio and reinvest the premiums in addition to dividends. Buy and hold is fine you just need to milk the volatility by writing calls and compounding.

I think the market is better the way it is today.

 

Is it really the traders or the big banks that create the games? I mean some one has to be allowing all the excessive leverage. Someone is creating new derivatives.

 

This is such a simpleton article, wrong on so many levels.

 

Look at the M3 money supply. This also caused problems...
since 1995 the entire market has been over valued... this has nothing ot do short-term trading.

 

1 + 1 = 2

You do not need to quantify the above math statement that 1 + 1 has good value.

So, what value investing really means, is that,

1 + X = 2

You know X = 1, but most other people think that X < 1.

In short, value investing is about stealing the good stuff from the poor people who do not have the privileged information, and you choose not to tell the truth.

By understanding this, then there is nothing wrong with stock evaluation in an open auction market being pushed around by whomever for the sake of making profit.

After all, the dictionary definition of "invest" is to obtain profit from money that is put to use.

Value or not does not matter.

=)

 

Why won't you write puts instead. Even better.

 

I do as well. It all depends.

 

Very few of the nation’s financial planning firms are structured this way.The debtholders were going to get crushed. The shareholders were wiped out. Except that they weren't. With advice from top independent financial advisors, empowered readers can make effective asset allocation decisions in the face of volatile markets.