>BSDM is not suffering because of computer driven trading. Those guys price themselves between real buyers and sellers and shave a little off for themselves. But computer driven trading exists for all stocks, and not all stocks tank. Some say computer driven trading is not a real loss to investors because the market is more liquid. I can recall when a stock like BSDM would trade something like 5/8 x 6/8. At least the spread is not so great now under the new systems. Since BSDM is traded a lot, the spread is less than a penny.<
Chris, I am evidently not succeeding in making my points clear. In my defense, I hold that the topic is somewhat difficult. While trivial compared to Quantum Theory (which I admit to not really understanding), ultra-high-speed quoting/trading is complex enough to be a difficult topic. In fact, the issues raised between short-term traders and long-term investors have always been “messy” and even contentious. A massive degree of adherence to one surely affects the other – in part, just because money is not limitless. Recently, it has been noted in various statements that “HST” has reached a level of about 90% of trading; which trades have increased about tenfold in number. Quoting has increased even more, I believe; based on what I have read. And, the basis for this dominant activity – the reasoning and strategies and tactics for HST -- are total anathema for long-term investors. (That said, HSQ – high speed quoting is much more to the point.) So what? Well, the number of stock players and the money involved have not increased accordingly. So, long term investing has suffered a great loss of attention and money – right? How could it be otherwise? And, BSD Medical is a classic example of a very attractive long term play! But, from short-term considerations the company is about as attractive as a turd. Here is what I wrote for the IV MB:
>>Indeed. It’s almost as if the market did not know or understand that BSD Medical is the acknowledged world leader in a highly effective, proven new cancer treatment therapy – nor that the therapy is being adopted throughout much of the world – nor that it has been promoted by outstanding doctors as the fourth “pillar” of cancer therapy (not merely just another slight advance) – nor that one major world-scale marketer has become a strategic marketing partner – nor that other large companies are seeking-out BSD Medical for similar partnerships – nor that the technology is better than any other for lung tumors (a major need) as well as for many other cancers – nor that BSD Medical is readying a new product. But, it appears all this extremely positive information is being ignored – at least by those interested in long-term investing. Aahh! – there’s the rub! Short term investing has become so utterly dominant – due to the incredible level of Algobot trading activity (now up to about 90% and still rapidly growing?) -- that it has highly subdued the long-term investing interest. BSDM is only attractive from long-term considerations; and why wait for the long term when short-term Algobot thievery – err, trading – is so lucrative.<<
Do I need to point out that the above means the overall societal value of the stock market – guiding monetary support to the “best” companies – is utterly corrupted? The hugely important task of providing “spoils” -- to the victors in a fair contest to provide various desired or important economic activities -- is ruined by Algobotic trading (which activity is inherently stupid!). (That should be “more thoroughly ruined”, as short-term trading has always been detrimental to the overall economy).
Thanks for your interest, even though we disagree.
BTW, “Algobot” is a term I coined to emphasize that the computers located at the various exchanges not only “analyze” (by means of algorithms) but make decisions for quotes and trades. In an important sense,they are “entities”! -- and now the dominant players in stock trading.
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