My humble take on Etrade and the market. I was reflecting this morning, and I thought about volumes. Last summer volumes went down to, what, 700k average. At this point we have many more players, and volumes will probably range on average between 1.1 and 1.4 million a day at the lows. This is just a guess based on feeling mostly. Etrade, as we all remember, weathered last summer beautifully, adjusting spending etc to compensate for lower volumes. Also, they now earn significantly more revenues from non-commission sources. They have executed according to their stated plan way ahead of schedule and better than anticipated. In short, they are wildly successful as a business. Stock price is another matter that time will take care of, as it is determined overall by perceptions. People still need to be convinced. No problem for me, as long as the business continues as they have been doing I think folks will come around, sooner or later.
In terms of the market overall, to give added support to Etrade's success, I think the markets will continue to rise. This is based on the statistics that show an expanding use of the markets on a worldwide basis as the infrastructure grows. More and more investors, more and more growth, bigger funds, etc. I think the Bear is a myth, or a best a seasonal trashing from an absence of biggest players. Volatility, as produced by daytraders, will almost certainly continue for years. How many years is another matter, but a few more, I think. It is possible that we may never see the kinds of Bear markets people talk about, where markets languish for years at a time. As long as there are daytraders out there stirring things up, everyone else will pay attention and want to play. Individual investors, human beings in general, learn from experience, so I expect everyone, more or less, to get better and better at investing and speculating in all kinds of markets.
There's been a lot of growth in this area, and I expect a lot more in the years to come. A good reason to hold my Etrade shares a little longer... |
