Meaningless Trading.

Two articles, one says that the ratio of insider selling to buying is at an all time high: 3177 : 1

The largest companies in three of the most important leading sectors of the market have seen their executives classified as insiders sell more than 120 million shares of stock over the last six months. Top executives at these very same companies bought just 38,000 shares over that same time period, making for an eye-popping sell to buy ratio of 3,177 to one.

for every person buy stocks for which they have insider information, over three thousand are selling. The second says that over 70% of stocks are held for an average of 11 seconds:

These are short-term bets. Very short. The founder of Tradebot, in Kansas City, Mo., told students in 2008 that his firm typically held stocks for 11 seconds. Tradebot, one of the biggest high-frequency traders around, had not had a losing day in four years, he said

Obviously the former is very negative, and the second indicates that reality is irrelevant. The majority of the trading of stocks has nothing to do with the fundamentals of the companies involved, and everything to do with trading algorithms competing against each other in a some sort of ‘game of life‘. Madness.

While you’re down there (in the pits of despair) you may as well read about how Wall St. banks are working around legislation designed to put an end to prop trading.

“Permit me to issue and control the money of a nation, and I care not who makes its laws.”

–  Amschel Mayer Rothschild 1773-1855

2 thoughts on “Meaningless Trading.

    • Wish i had answers for you… but the only obvious answers (imposing high Tobin type taxes on trades that are not held for a long enough) are decried as anti-capitalist and unfair. It would appear that what we have now is inherently fair and cannot be improved upon (from the banks view of regulation…)

Wise words...

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