Rande, you have repeatedly illustrated to us how the deck is stacked against the Individual Investor, and this morning I read this piece in IBD:
"Heavy trading in Nortel Networks options just before the telecom-gear maker's warning on Thursday is being probed by the Chicago Board Options Exchange."
Now let's see...where do you suppose this "unusual activity" was coming from? The Individual Investor who has absolutely no clue he is about to get sideswiped by an earnings warning? Or the institutions, using inside information not available to the little guy? This is really nothing new, we all know this goes on day after day. You and others here have pointed out similar instances of this over and over. But this blatant and obvious use of information not available to the investing public has me questioning the whole thesis of investing in the market for the little guy, the investing public. Apparently, the mutual funds, institutions, and hedge funds either sold their positions on Thursday before the close, or hedged their positions with options. How can an individual investor buy and hold anything, let alone hold a position overnight with any confidence? The mutual funds are OK. But since the average individual investors account is fairly small, they are generally not that diversified, and they have no clue their NT position which may be 20%, 40% or more of their portfolio is about to get cut in half. Holding a position overnight lately is worse than going to the roulette table and betting on red or black. And this type of activity which occurs day in and day out, is driving investors out of the game and into mutual funds just like the Po Boys want, or forcing them to become daytraders going flat at the end of the day. So, where does that leave us? |
