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Pastimes : The Naked Truth - Big Kahuna a Myth
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To: Terry Whitman who wrote (69823)10/19/1999 8:33:00 AM
From: BGR  Read Replies (2) of 86076
 
But, did you notice that nowhere is the time to trade mentioned? Does that say something to you?

To all traders in this trading thread (so I have been told), the Economist magazine has a must read article in this issue, about the slow death that propietary trading is facing in the major financial institutions, as the risk reward ratio is no longer favorable for trading in this age of rapid information flow (just as predicted by ... well, you know <wink>)! :-)

economist.com

Quote from the article:

There was once a good rationale for investment banks to think that they might have an edge over other investors in the markets. They were paid to transfer risks from one client to another. And since they were the conduits through which this business passed, the information helped to give their smart, tech-savvy traders an edge. Chinese walls or no, it is no accident that most proprietary-trading desks are placed in the middle of the trading floor.

But the rationale has lost its force. Advances in technology have made information more freely available and have remorselessly reduced spreads (the differences between buy and sell prices). Yet the risks involved in trading have not fallen?rather the opposite. ?On a risk-adjusted basis these businesses stink,? says one insider.

-BGR.
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