Average stock ownership time 22 seconds

Discussion in 'Stocks & Derivatives' started by Matthew 26:14, Jan 4, 2011.

  1. Matthew 26:14

    Matthew 26:14 New Member

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  2. Slam

    Slam Active Member Silver Stacker

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    There was an interesting video on 60 minutes about computer trading and the algorithms they were using.

    This guy setup his server closest to the stock exchange servers and was able to detect and front run large buy/sell orders coming in. So he was skimming profits of cents in a dollar before the main purchases.

    They are making a killing this way and rarely lost any money. They bought any stock and didn't really care, as long as they can offload it quickly when the buy order came in.

    I believe the above will impact the average time owned.

    Slam
     
  3. Guest

    Guest Guest

    This shows you clearly how rigged the market is.

    I'll stick with commodities thanks.
     
  4. JulieW

    JulieW Well-Known Member Silver Stacker

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    This is how you have a crash that no-one planned.

    The algorithm says sell and timing means other computer algorithms say sell and then suddenly ALL the computers are saying sell and they've sold a trillion of stock in a few minutes. On a bad day the humans then get on board and it's all gone.

    The stock market is for gambling and has no relativity to the basic soundness of an investment or the potential dividends. It's all about making that 0.01 cents per share buying and selling with the computer programs.

    This is why they say it will happen quicker than anyone can believe.

    http://www.marketoracle.co.uk/Article19341.html

    Who do you believe?
     
    66rounds likes this.
  5. Bargain Hunter

    Bargain Hunter Member

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    All this lightening speed trading which is totally unrelated to fundamentals creates more volatility and provides more opportunities to buy low and sell high for value investors like me. It also provides more liquidity. So as far as I am concerned it's to my advantage.

    If you read (I think it's the right book, maybe it was another one of his books, or a book written by Kenneth Fisher his son?) Common Stocks and Uncommon Profits and Other Writings by Phillip A. Fisher (a legendary investor) there is an interesting anecdote about how their was a competition somewhere with a prize for guessing (who got guess the closest) what the Dow Jones would close at tomorrow. Apparently Phillip Fisher picked at the time that it would close around 1% lower (or maybe it was 1% higher I don't remember). At the time this was seen as an outrageous guess and about as common as a 10% daily move in the Dow Jones might be today (i.e. bloody rare). He made this outrageous bet so if he won he would look like a genius. Apparently by chance he did happen to win. It just goes to illustrate how much lower the daily volatility and trading volume used to be, as there were far more people holding there stocks long-term.

    Just as if is being speculated about JP Morgan (I'm not totally convinced) is actually trying to push down silver prices that just creates more buying opportunities for me.
     
  6. boneyard

    boneyard Well-Known Member Silver Stacker

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    Good info & thanks for it.

    But this info is for the US ?

    What about the ASX?
     
  7. systematic

    systematic Well-Known Member

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