Topic of Discussion - Shed, Rob, Cuervos, othersby Danny on August 25th, 2008 at 10:38:56 pm |
It seems as if the buying strength and selling weakness trade ended right when the proliferation of the internet gave millions of investors and traders access to the same previously exclusive indicators and thought processes propagated by a relative few sophisticated investors/traders in the past. It doesn’t seem like a coincidence to me that what worked for 40 years relatively quietly would stop working once every knows how the momentum game is played, up = up, down = down. Did any of you guys come up with theories as to why the trade lost its edge?
Danny,
the 60’s, 70’s and even 80’s were not like that. imo, internet had little to do with that. the 2 things that contributed the most to the onslaught of mo players imo were,
1- black boxes
2- the kind of bull market we had from 1994-2000. a market on viagra for 6 years.
August 25th, 2008 at 11:11:54 pmI started following the markets everyday in 2003, and was also speaking from my own experience - no doubt my learning curve was shortened because I read a lot and followed traders blogs like dr. barg, howard, fly and others which increasing my experience vicariously through them.
You never stop learning, but given my dedication to the matter at hand, I was able to gain (imo) decades of 1980s experience in a shorter time, thanks to the internet.
I think your reasoning makes perfect sense, I was hoping for a bunch of theories.
August 25th, 2008 at 11:14:48 pmDanny,
no doubt that the internet made the playing field more level for a whole variety of reasons. one thing that i think the internet has done with some notable exceptions is quicken trends and reactions to events.
August 25th, 2008 at 11:23:27 pmDanny,
It seems that it took 30 years for everyone to learn the first pattern, 15 years for the reverse pattern and now there’s no real pattern.
So the efficient market hypothesis is correct but it’s just very slow (although getting much faster).
August 26th, 2008 at 3:26:13 am