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Barry Ritholtz: Mom And Pop Outsmart Wall Street Pros
Sure would have been nice to include some evidence in support of that claim. Barry's evidence seems to come down to two things. First, computerized selling created Monday morning's disconnect between price and value. SBUX was down 22%. Some ETFs were down 30%. Second, he links to an article from January 2012 on the theme "sure has been quiet around here lately." Sadly, neither of those two bits of information (nor the fact that hedge funds were poorly allocated and that CNBC's ratings suck) support the claim that mom 'n' pop are finally cool, steely creatures.
The evidence he offers that folks are buying more ETFs actually points in the opposite direction (the "T" is for "Trading" and evidence I've seen suggests that people who possess trading vehicles, well, trade them). The evidence that TD Ameritrade froze up and that Vanguard had to do the "all hands on deck" thing to cover incoming calls suggests that mom 'n' were on the phone and at their keyboards . The WSJ reports that Tuesday's stock fund redemptions were the greatest in eight years.
I'd really like the headline to be true. I'm just not sure that I've seen the evidence to substantiate it.
I think it was early Monday that Bloomberg TV reported problems at some of the trading firms. One of their talking heads attributed it to frantic "buying".
I didn't believe it at the time - and sure don't now.
Comments
The evidence he offers that folks are buying more ETFs actually points in the opposite direction (the "T" is for "Trading" and evidence I've seen suggests that people who possess trading vehicles, well, trade them). The evidence that TD Ameritrade froze up and that Vanguard had to do the "all hands on deck" thing to cover incoming calls suggests that mom 'n' were on the phone and at their keyboards . The WSJ reports that Tuesday's stock fund redemptions were the greatest in eight years.
I'd really like the headline to be true. I'm just not sure that I've seen the evidence to substantiate it.
David
Have a nice weekend, Derf
I think it was early Monday that Bloomberg TV reported problems at some of the trading firms. One of their talking heads attributed it to frantic "buying".
I didn't believe it at the time - and sure don't now.
Actually, his colleague, Josh Brown, posted something similar to his blog. They must have had lunch together, or something:
http://thereformedbroker.com/2015/08/27/computers-are-the-new-dumb-money/
Yes, in his mind, Monday was a human triumph, and machines formed the loser crowd.