Cricketing Success Boosts Stock Markets
The U.S. stock market , as measured by the S&P 500 index, skidded 4% in January and rallied back just as quickly in February and March to end the quarter ahead 1.3% at 1872.34. Charlie Smith, manager of Fort Pitt Capital Total Return and founder of Fort Pitt Capital Group with $1.3 billion in assets under management in Pittsburgh, Pa., has set a price target for the S&P 500 at 1938, up 3.5% from its Q1 close. That's 17 times projected earnings for 2014 of $114 a share.
Voices: High time to unrig the stock market
Luckily, the research also discovered that Ashes defeats had little effect on stock markets, which indicates that risk appetite, while enhanced by sporting victory, is not affected adversely by sporting losses. IG analyst Chris Beauchamp, who conducted the research, said, The findings show that Ashes victories can act as a powerful boost to risk appetite, as theres a clear correlation between success on the pitch and better stock market performances. We looked at the returns for the UK and Australian indices over a 1-week, 1-month, 2-month and 6-month period, identifying small gains in the wake of victories, which rose steadily and solidified over time as the feelgood factor seemingly came into play. Fortunately, the regularity of Ashes tests means that we have a reasonably broad set of data to examine, whereas for World Cups there is limited data, both in terms of contests and stock market numbers. He also added, in terms of the key results: Given Australias dominance over England in the 90s, the element of surprise and the unexpected might explain why English victories, particularly in Australia, are linked with higher stock market performances. While an expectation of success may account for the visit homepage lower average returns following Australian victories.
We've got "computers entirely replacing the people," as Lewis writes. Algorithms flash stock orders milliseconds before slower-moving customer orders. That allows the high-frequency traders to skim off profits by making buyers pay a little bit more. Our idea of how the stock market works, with its picture of men in colored coats matching buy and sell orders, is hopelessly obsolete. "The world clings to its old mental picture of the stock market because it is comforting," Lewis writes, "because it is so hard to draw a picture of what has replaced it." Michael Lewis, author.
How To Beat The Rigged, 'Flash Boys' Stock Market
But the biggest reason the 1987-2014 comparison is bunk is because any comparison of a past rally to the current rally is arbitrary. Beyond the technical aspects of trading, the macro picture and economic outlook at home and abroad are not even close to comparable. The fact that the last rally ran out of steam in 1,311 days is meaningless. How many times must we disprove market trends such as sell in May before investors realize that market history should not be confused with forward-looking predictions?
Will the Stock Market Crash Like It Did in 1987?
"If [traders] were using some special information that only they had access to yeah, that would be a problem," said Manoj Narang, chief executive of Tradeworx Inc., a high-speed firm in Red Bank, N.J. "But nothing like that is going on." Some experts say the debate may be rendered moot because the high-speed phenomenon is showing signs of slowing down. A combination of regulatory reforms, changed trading patterns by mutual funds and a placid stock market has eaten into profits of high-speed firms. The collective revenue of high-speed firms fell to $1.1 billion last year from $7.3 billion in 2009, Tabb said. Still, the debate is unlikely to die down any time soon.
Have high-speed stock traders rigged the market?
We buy gold or stocks when theyre overpriced and dump them when theyre bargains. Theres a famous study that examined these strategies and found them to be consistent losers. Computers dont make these mistakes and can even manipulate prices through mega-trades that happen too quickly for humans to perceive. Financial Times columnist Tim Harford explains it nicely in this post. (Photo credit: francisco.j.gonzalez) How to Beat the Robots Since robotic traders are focused on short-term price movements, shift your focus to long-term trends.