The Voice of Joyce: Algorithms are an unfair advantage
I finally understand why millisecond trades are like Insider Trading and an unfair advantage! I now realize, it’s not that they purchase subscriptions to trade in milliseconds, or that they buy stocks in bulk, it’s ” the algorithms “, that make their trading unfair, uncompetitive and something I can’t follow and read about.
” In the old days”, I read a Balance Sheet on a company, or I invested in a company because they had excellent management and a great product. I understand companies and business. However, I have no knowledge of algorithms; I don’t know what criteria they use to trade. At a millisecond, I have no idea if they’re betting for or against a company or the market.
Since, I have to guess what a limited number of traders will trade? Mr. Market has become unpredictable. It is no longer a level playing field. It has become a rigged market for the few.
I get it. I am not at a disadvantage because of money, or bulk trades. I am at a disadvantage because algorithms are not transparent to me. That’s why I object. That must be why Bogle and BUFFETT advocate purchasing index funds? No one can compete with the algorithms.
This form of trading is a bigger gamble then investing in stock in a Corporation. That’s why BUFFETT must be advocating holding stock in a ” good” corporation forever. The millisecond traders speed increases the algorithms advantage. We are no longer purchasing stock in a company . We are betting for or against ” the table”!
I have a question for David Boise’s law firm. I’ve been told we can’t penalize Fast Traders and characterize their trades as Insider Trading based on speed and access. However, is it possible to bring a Lawsuit against them, based on the lack of transparency of their Algorithms? Does the use of these Algorithms constitute Insider Trading? Are these firms creating the Market?
Dear reader, thanks for following. If you have comments to add to the debate, please do. Community involvement on this and many issues moves us toward a workable Democracy. Additionally, to supplement my text, Justin Draws will once again be providing political cartoons. Please look for our ” humorous” view of Politics, the Markets, and inequality, as we look for solutions for the 21 st Century. Thanks for reading.