131–140 of 233 posts
Anyone who ever considers this sort of thing to be "unfair" or "cheating" should also consider how comparatively easy it is to make a nonsense of.
Who wants to go halfs with me on a large-format printer?
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The line is not blurring. Non-public information is information owned by the company. This is different from information that is hard to acquire and hence, not available to everyone. You are making the same mistake the article does when you state this line is blurring.
> The line is not blurring. Non-public information is information owned by the company. This is different from information that is hard to acquire and hence, not available to everyone. I didn’t realize it was so cut and dry. How silly of me! I guess all of the work I’ve done providing legal advice to hedge funds on what is and isn’t insider trading since Preet Bahara first came to town was for nothing. Thanks for cle…
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They absolutely shouldn't play unless they like losing money. It is extremely hard for professional investors to beat the market who spend all day every day working on it. It is basically impossible for a collection of retail investors to beat the market. At best, retail investors are simply gambling.
> "At best, retail investors are simply gambling." that's just not true and is a gross over simplification. for one, not beating the market is NOOOOOT the same as losing money. For another, even if they do not beat the market, there are a lot of other benefits. People gain an understanding of how things like bonds and equities work. I cant tell you how many people (masters degree included) think you can loose more mo…
I personally invest primarily in well diversified, extremely low cost ETFs and I buy 1 - 2 positions a year outside of that portfolio (right now the main one is bitcoin for me). But, I'm always looking around for something that I think can be a 10X return.
But... I rely on my primary diversified portfolio for my retirement and the single 1 or 2 investments I make outside of that are for fun, knowledge and I fully acknowledge gambling.
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Why is trying the interests of retirees to shareholders "kind of dumb and fucked up"? I'm not even sure there is a valid distinction between the two groups. The retirees are shareholders.
Gee, I dunno, maybe think about it for a second. What does a 65 year-old lower middle-class retiree with some money stashed in a 401(k) have in common with an ExxonMobil shareholder aside from the need to generate as much profit as possible? Do you really think this makes sense from a public policy perspective, to pit the retirement needs of the old against, e.g., the environmental health of the young? Please spare m…
But couldn’t you argue in exactly the same way for disenfranchisement? Do you think retired people should be allowed to vote?
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They absolutely shouldn't play unless they like losing money. It is extremely hard for professional investors to beat the market who spend all day every day working on it. It is basically impossible for a collection of retail investors to beat the market. At best, retail investors are simply gambling.
> "At best, retail investors are simply gambling." that's just not true and is a gross over simplification. for one, not beating the market is NOOOOOT the same as losing money. For another, even if they do not beat the market, there are a lot of other benefits. People gain an understanding of how things like bonds and equities work. I cant tell you how many people (masters degree included) think you can loose more mo…
Nothing wrong with being investment savvy and all that jazz but obsessing over it doesn't sound healthy.
People can enjoy a fancy plate or 2.
This type of data is ultimately used to predict revenue for consumer companies. Cellphone data and wifi data is much better for that type of prédiction.
There's a whole marketplace where companies with so-called "Alternative-data" sell their datasets to quant traders. Satellite imagery of farms, passenger traffic through airports, all sorts of random, seemingly disparate data.
The reason your free weather app asks for your location data isn't for "local weather forecasts". Well, it is, but that's a cost for them. The income comes from keeping that location tracking on all the time and selling which stores and dentists you go to. Someone can link the NYT story from a few months ago when this came to mainstream attention. Hedge funds also fly cesnas over refinery fields to look at the levels…
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…
Which part of the article do you think confuses MNPI with alternative data? It seemed that the purpose of the paper is to point out how the line between “public” information and “non-public” information is blurring for those who can afford access. And given how difficult it is to define insider trading that seems like a pretty accurate assessment to me. Alternative data firms are the new expert network firms in the w…
I fail to see the parallel with Rajaratnam, since Rajaratnam was accused and convicted of insider trading on the basis of leaking from corporate insider executives(!) That's precisely the distinction that is being drawn in the comments here, between theft of insider information and the acquisition of difficult-to-intuit public information.
To answer your question, these parts:
> But technology is increasingly blurring the boundaries between public and private information, creating data opportunities that are legal, but are expensive and often require special expertise to access. “Technology was supposed to level the playing field, but what I see is the fence separating sophisticated and unsophisticated investors growing higher,” says Patatoukas, who is passionate about teaching his students to analyze public sources of financial information and finds the trend troubling. “That’s the dark side of big data. Our evidence suggests that unequal access to alternative data leaves individual investors outside the information loop.”
> In the aftermath of the financial crisis, there has been increased regulatory interest in the role of informed trading and disclosure requirements to protect the fairness and integrity of capital markets. With this in mind, Patatoukas hopes that the paper will get the attention of the regulators. “In a market setting where the line separating public from material non-public information is getting blurrier, the question that regulators need to answer is: What is their role in terms of leveling the playing field for individual investors?”
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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.
I agree, but where's this end up? Why would retail investors play a game where they're almost certain to lose?
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If this discussion is still narrowly tailored to the securities market, since this discussion was also about "insider trading", which is a unique prohibition to the securities market and not any other capital market then: Retail has no business in the securities market. thats where it ends up. stop playing. retail investors flocking to the stock market is a 40 year old meme that is built upon non-objective thought an…
Laziness? It's built on desperation. There were some solid ways to develop retirement strategies with lifelong careers, pensions, and other older retirement vehicles. However, pensions are largely irrelevant outside the public sector now, the older retirement vehicles have stagnated/become poor investments (like annuities, which have become a landmine for terrible fees), and what was left was 401ks and individual ret…
It is pretty amazing and ingenious.
No, it doesn't undermine the observation that retail shouldn't be playing.