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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Bonnie Bear who wrote (14546)	3/2/1998 4:34:00 AM
From: Michael	Read Replies (1) \| Respond to of 18056

Re: Your fire and forget type strategy for the brokerages, I'd like to raise a cautionary note. 20 years is a long time and a lot could change in that period. For instance the brokerages, as I understand it, make most of their money on the "kick-backs" from the MMs or their profit on the spread for those brokerages which are also MMs. This easy money is now being challenged by the likes of www.witcapital.com. They aim to become like the Istinet for retail investors. Given the Internet (connectivity) and E-Commerce (for Settlement) this may have a better than evens chance of succeeding. Basically that ole buzzword of the Internet, disintermediation. The fund managers are also intermediaries, though (in theory at least) they add more value than brokers. However its a fact that most funds underperform passively managed indexed funds. With things like 'Diamonds' available people can easily dispense with Index fund managers today so what is the managements company's additional value add going to be ?. Those two items are only what's "above the horizon" today. I expect we will see as much or more change in the next twenty years as we have in the previous ones.