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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: LPS5 who wrote (13525)	8/12/2001 11:45:02 PM
From: Libbyt	Respond to of 18137

Thanks LSP5! I am sure that I am one of many who have you "PeopleMarked". I appreciate your knowledgeable posts and the "inside" look into the "behind the scenes" market that many of us never see. (I have to confess I skip your Boxing posts. <g>) I have found your logical and perceptive comments extremely helpful and educational, and I appreciate the time and energy that you spend to answering these questions Thanks for taking the time to share your knowledge and expertise in this area!

To: LPS5 who wrote (13525)	8/13/2001 1:30:21 AM
From: Raymond Duray	Read Replies (2) \| Respond to of 18137

LPS5, Thanks for the viewpoint on the trading tactics on Wall Street. You and I are in agreement that secrecy is a tool used by the most astute players whenever it is deemed tactically advisable. I think that we may have a point of disagreement however, regarding the relative levels of greed on the Street. Here's a Michael Lewis column that addresses this issue: quote.bloomberg.com A couple of salient snips: But the competitive advantage of the commercial bankers runs deeper than their lucky accounting standards. The biggest advantage commercial bankers have over investment bankers is that they aren't as greedy. They were born with lower expectations. What looks like an unthinkably rotten deal to Goldman Sachs looks like the most exciting piece of business in the history of the known universe to Bank of America...... No doubt the investment bankers still believe that no commercial banker with his decent family values and his nine-to- five attitudes and his pathetically low financial expectations can pose a threat to an investment banker. Even the commercial bankers seem to believe that the more rarefied -- and profitable -- investment banking services such as advice on mergers and acquisitions can't be bought. Now, I haven't done a salary survey recently, but it is a well known fact that the investment banking industry has had a long and well deserved reputation for over-paying its help. You may chose to disagree, I expect you will. Perhaps you will even attempt to argue that the seven figure salaries and bonuses of those at GS, MSDW, M/L, BS, etc. are all justified. Since I view this from the retail perspective, and since nearly every retail investor in this country has lost money in equity positions over the past 16 months, I'd say these fancy incomes that the players on the Street get can hardly be justified by the results endured by those who are supposedly (to read the advertisements) to be benefitting from the talent of the staff. Re: to keep their activities secret. And that's a good thing! You mentioned 401K holders, widows and orphans; ironically, in fact, all of whom are, in most cases, direct beneficiaries of those same secrecy-craving institutions. They include investment companies (under the Act of '40, most of which are commonly known as "mutual funds"), pension funds, endowments, and state trusts, among others. If daytraders, proprietary traders, hedge funds, competing securities firms, and all the other various and wonderful organisms operating up and down Wall Street knew what they were doing, well, you can just imagine how quickly spotted opportunities would disappear. Well, I guess I'm just stodgy enough to see this as a bunch of hooey. All of this secrecy and compulsive trading (gambling) is no way to run a national economy. To me, it is madness and a sickness that has nothing to do with the prudent allocation of capital to fund productive assets and corporations. The houses certainly are trading, and they are trading for their own benefit. Not for the benefit of the widow & orphan type of customers you enumerate. The trader must make money for the firm in order to secure his bonus. It's that cut and dried. Whether or not the customer makes anything is highly irrelevant to the activities of a trader at a Wall Street firm. In fact, fleecing customers seems to be a regular event on the Street. For lurkers who have a more conspiratorialist bent, here's a good read, about a marvelous stock swindle that was aided and abetted by the kind folks at Merrill*.... observer.com This ought to be part of the primer of every retail customer, along with Chancellor's "Devil take the Hindmost". An excellent modern update to Charles Mackay's "Extraordinary Popular Delusions and the Madness of Crowds". The most extraordinary popular delusion that I see extant today is that recovery from the recession is imminent. I think that this particular bit of misplaced optimism can very handily cost the retail investor a hundred billion more in sucker rally fadeouts..... [[Aside: * Gentle readers (LP bear with me, this portion isn't addressed to you), in 1999, trusting M/L's research department to a small extent, I placed a low ball limit order bid for IRID, about six bucks, or 20%, away from the bid. It filled in a couple of days, but boy was I surprised when I found that it filled at the price of a dilutive secondary offering that somehow wasn't mentioned along with the glowing praise in the analysts workup. Fool me once, shame on you. Fool me twice, shame on me. I never, ever trusted a single word that Merrill put out after that episode, and neither should you. ]] Namaste, Ray :)