41–50 of 233 posts
Nothing new here other than satellites. Years ago (1990s?) Peter Lynch - at the time manager of the largest mutual fund followed his daughters into a shopping mall for back to school - his daughters didn't go into GAP stores so he went back to the office and sold as his shared of GAP. His fund beat everyone else by a large margin because GAP stocks dropped a month latter when they announced the earnings drop. This is…
I find it somewhat interesting to what lengths traders go for profits. Cue people who explain how this makes the markets more efficient. Something I'm wondering about though: The article makes it sound like this is some new unfair advantage of the big traders. But isn't this an old game? If you can afford to acquire and process the data you're likely going to beat the other participants. That was always true. I don't…
> I find it somewhat interesting to what lengths traders go for profits. That's not too surprising. Isn't that the entire motivation?
>“What we found is that it’s a gain for large sophisticated investors who can afford the substantial costs of acquiring and processing big alternative data”
This is yet another example of wealth accumulating, of rich actors getting richer faster than poor ones. Without some controls on the behaviours that allow wealth to accumulate, it will further concentrate among the wealthy. I would argue that is a bad outcome.
This article is very wrong to confuse "material non-public information" with hard to acquire information like counting cars in satellite photos. Remember the Matt Levine test: insider trading is about theft, not fairness. When a company insider uses private company information to trade (or colludes with an outside party to do so) they are stealing material non-public information from the company for their own benefit…
While appreciating the usefulness of this quote, one should also understand that usefulness is limited by the actual enforcement of insider trading laws and insider trading doctrine generally, which does not square with the analogy. There is certainly an element of "fairness" that is being protected implicitly and/or explicitly in enforcement actions, with the purported interest of keeping the markets attractive to retail investors. On the other hand, "fairness" is undermined in cases like Enron where prohibitions on insider trading likely artificially reduced downward pressure on the price of the stock (costing investors who bought later larger losses) by disallowing folks who understood what was going on from selling the stock.
This article is very wrong to confuse "material non-public information" with hard to acquire information like counting cars in satellite photos. Remember the Matt Levine test: insider trading is about theft, not fairness. When a company insider uses private company information to trade (or colludes with an outside party to do so) they are stealing material non-public information from the company for their own benefit…
I believe the counter argument is only people with enough wealth to afford an account at one of these hedge funds gains an immediate advantage here. So it's yet another way "the rich get richer."
Doesn't bother me, but I can see why other people would have a problem with it. And I severely doubt more than 5% of the planet cares about whether "in the end we all get more accurately priced securities."
This article is very wrong to confuse "material non-public information" with hard to acquire information like counting cars in satellite photos. Remember the Matt Levine test: insider trading is about theft, not fairness. When a company insider uses private company information to trade (or colludes with an outside party to do so) they are stealing material non-public information from the company for their own benefit…
Better data yields more efficient markets which is what we actually want.
“Technology was supposed to level the playing field, but what I see is the fence separating sophisticated and unsophisticated investors growing higher,” says Patatoukas
As if that's a bad thing or a surprise to anyone...
I find it somewhat interesting to what lengths traders go for profits. Cue people who explain how this makes the markets more efficient. Something I'm wondering about though: The article makes it sound like this is some new unfair advantage of the big traders. But isn't this an old game? If you can afford to acquire and process the data you're likely going to beat the other participants. That was always true. I don't…
It increases the information that makes its way into the markets and makes it more likely that the price reflects the what's happening in the real world. A world in which nobody bothered to check whether a company was actually producing anything would turn the stock market into a collective guessing game.
Finding someone successful at stock picking and asking him what he did to be successful is like finding that 1 out of 1024 person who flipped a coin heads 10 times in a row and asking him what makes him such a great coin flipper.
This article is very wrong to confuse "material non-public information" with hard to acquire information like counting cars in satellite photos. Remember the Matt Levine test: insider trading is about theft, not fairness. When a company insider uses private company information to trade (or colludes with an outside party to do so) they are stealing material non-public information from the company for their own benefit…
This is exactly right. If you're upset about this then you should be upset that hedge funds can afford to hire smarter analysts than you, which is just silly.
This article is very wrong to confuse "material non-public information" with hard to acquire information like counting cars in satellite photos. Remember the Matt Levine test: insider trading is about theft, not fairness. When a company insider uses private company information to trade (or colludes with an outside party to do so) they are stealing material non-public information from the company for their own benefit…
> When a company insider uses private company information to trade (or colludes with an outside party to do so) they are stealing material non-public information from the company for their own benefit. I must be dumb, but I don't understand this statement... How is that a "theft"? You knowing that I eat 2 eggs in the morning when I don't want people to know is not you "stealing" information from me.