1/27/2011

Crying foul again!

Super computers and high speed trading system in equity and derivative tradings. These traders are armed with the latest technology, computer systems and algorithms to place their bets in the stock markets. The technology gives them the advantage to buy and sell at the best price after having a quick peep at all the orders in the market. And they have a big war chest to back up their bets to drown out the small traders. Now, is this a game of pokers, a game of chance, or stock trading? Is it investing or gambling? Who are the big traders with their expensive gambling machine playing against? Are they gambling against their peers with the same formula 1 machine or are they cheating or violating the small investors? When they are competing against the same kind with the same level of resources, technology and equipment, it is fair play. But if they are employing their mean machine to take advantage of the small and ill equipped investors, someone must cry foul. Fair play is what stock markets swear to do. Protecting the small investors against foul play, against being taken advantage of by unfair practices is what the stock markets stood for. By allowing such machine to maul down the innocent small investors must be a serious breach of the integrity of stock market principles and operations. If not, stock markets must be renamed as casinos and be governed by the rules of gaming applicable to casinos.

5 comments:

Wally Buffet said...

Excuse me Sir, can I say something?

How come despite all the foreboding rants you have on the workings of the big boys with their supercomputers and mysterious algorithms, I can still make money on the stock market with my little Apple Ipad?

Cannot understand what the fuss is all about.

One theory I have is that the big boys are pitting themselves against who else, but the other big boys.

Little kuching kurap ikan bilis are absolutely not affected. I am the living proof.

Hehe. :o)

Chua Chin Leng aka redbean said...

Have you heard of the 3% winners and 1% losers? I have my 3% winners and 97% losers in my client list too.

That is part of the game. What is not in the bargain is unfair competition. You don't have commercial production sports cars racing with formula 1 cars do we? You don't have heavy weights fighting bantam weights right?


But in some areas you have supertalents walloping uneducated ah bengs. That's life.

In a profession contest, there are rules for fair play.

Anonymous said...

"Now, is this a game of pokers, a game of chance, or stock trading? Is it investing or gambling?", unquote.
Hi Sir, what's the difference of investing and gambling nowadays?

Wally Buffet said...

Sir, I think your clients should themselves do more due diligence instead of relying too much on investment "advice" which was no doubt given in good faith.

The first rule of good investing......Find out as much facts as you can for yourself. Rely 10% on "recommendations" and absolutely pay no heed to all the Investment gurus on CNA, CNBC, Bloomberg and what nots giving you the lowdown on which shares to buy. If they are so bloody prescient, what the fuck are they working for someone else?

They should be like me, working for myself.

Hehe. :o)

Matilah_Singapura said...

That is why I laugh at most traders: you are trying to beat machines which can "think" faster than you and can act at speeds you can't even imagine.

Some of the best machine can make 10,000 trades a second. You want to go against a market who has that -- good luck to you.

Also, any fool with a computer can download free trading software. So even "small timers" are computer-aided now.

To me: it is value investing or businesses with lots of free cash flow. Forget the gambling lah. Try playing chess with a computer and beating the machine first lah.