Brian Sack And The Robots Claim Another Market Neutral Victim As The Market Continues To Reward Only Failure

Tyler Durden's picture

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yipcarl's picture

Mind boggling lies, manipulation, and outright scandel plague our political and financial system and anyone who doesn't see it chooses not too.  It's so obvious my fear is that most of my fellow Americans have absolutely NO CLUE what is happening.  We are a bananna Republic and our capital markets are rigged like the towers on 911

Paul Bogdanich's picture

While I agree that the symboitic relationship between the ploiticians and the bankers has turned the market into a rigged game and further agree with Messrs. Ichan & Mobius that a repeat of the prior problems is inevitable given the inability to neact any meaningful reforms.  That said some of these funds in Denver like James, Janus and many of the others are not the best run vehicles in the world.  You can find worse like Fidelity but the inability at James to see that the smart money is convinced another crash happens and as a result are playing short term trades in high liquidity issues therefore depressing the stocks of the stable slower growing companies is a failure on their part.  A dangerous failure at that.  These guys actually believe that the "system" is fixed and that the probability of another crash is negligible.  In my view this is a problem on their part and that belief is also why they can't understand the poor return on their strategy.  If a crash happens these "high quality" issues go lower with everyone else and before the crash they have less upside than other issues.  So in that situation and given that nobody knows what will percipitate the next crash nor when that will happen, why buy these "high quality," slow growth issues now unless they are under the trading range for a <30 day flip?  Doesn't make any sense.  IMHO 

duncecap rack's picture

Capital context keeps saying the up in quality trend in bonds is pervasive. Might it not follow in stocks soon as well?

random shots's picture

http://performance.morningstar.com/fund/performance-return.action?t=JAMNX&region=USA&culture=en-US

Tyler,

JAMNX was an underperforming fund way before HFT and POMO. Reaching very far with this story...

jm's picture

Yes, they sucked, but they really started sucking after QE began.  This speak volumes.

rocker's picture

Why couldn't they do as well as Goldman, JP Morgan and Back of America. Between the three. Over 90 days of trading  yielded one minus day at one firm. The rest had perfect days every day. 

jm's picture

Different strategies and market neutrals don't have a flow desk.

max2205's picture

This is just another way to say that an overbought market is reversing to ...... On it's way to oversold down the road

cowdiddly's picture

I used to be a fundamentals based Value Line type investor and sometimes a catfish. Guys like me have been run out of the market for 2 years now as nothing makes any sense. I don't buy what I don't understand. Its all yours robots and momo monkeys. Have fun eating each other. I will save my money until you guys are done destroying things and when it comes back to earth and news and fundamentals matter again I'll break out the monopoly wheelbarrow. Until then there are legions of us saving our ammo to play another day if and when our markets ever return from a central planned nightmare. As Uncle Ben pumps money in, all the corporate insiders sell al their free shares as fast as they are vested. In effect the gov't is transfering future tax revenues to maintain the lifestyles of the corporate officers and directors:Sad but true.BUY REITS LOL

jm's picture

I like to think of it as "going to Vegas".  I buy cheap lottery tickets.  Buying stuff bid up by robots ain't doing it. 

HFT is based on the illusion that minimizing the time horizon reduced liquidity risk and such.  Nanoseconds or no, some robot is going to get left holding the bag on some of this stuff.

NotApplicable's picture

We need a zombie Andrew Jackson to slay the zombie Fed... again.

slewie the pi-rat's picture

i think we'll need mo momo.

obviously, these losers weren't into PMs.  it's out to pasture if ya can't out-perform congress.

geotrader's picture

Why didn't they just buy NFLX?

Beatscape's picture

Trading is hyper competitive and highly dynamic. It's no surprise that the old style Benjamin Graham value investing doesn't work anymore--especially as people are looking for alpha returns.  You aren't going to attract the big money folks with ZIRP as the new norm and the backdrop for safe coupon clipping.

Today's economic landscape has a winner-take-all-mentality--and everyone is chasing the winner in each category.  And, this drives the stock prices of those apparent winners into stratospheric valuations. Facebook has wiped away previous darlings Geocities, MySpace, Friendster, etc.  Apple, very late to the game, re-defined mobile cell phone devices and now has a product that contributes $12+ billion per quarter in revenue. Google rules the internet search market.  Netflix is now the leader in on demand video--a new market that killed Blockbuster.

Combine the search for tomorrow's iPhone with a Fed that refuses to acknowledge rampant inflation as it expands it's balance sheet beyond anything thought possible without igniting world-wide hyper inflation, and you have the ingredients for a market that is not going to adhere to the old rules of thumb.

If HFT systems can generate consistent 100% winning track records, then (like it or not) the world's money is going to seek out these new alpha algo-driven trading funds.

I suppose I'm just stating the obvious here...

 

Gordon Freeman's picture

No, that's a pretty good summary...

Why anyone would "invest" in the stock market, given the current realities, defies logic.

Use of Weapons's picture

As a serious question, who coded the HFT?

I was in London when the change over to electronic trading occurred, so its been a couple of decades, but someone must write the code.

 

Find them, you've got your golden ticket.

monopoly's picture

Yes, someone like Andrew Jackson, James Madison or Monroe. We need a leader whoe does not care about being re-elected. Does not need 80 millon dollars, yachts, 4 homes, and $50,0000 bracelets for his wife, and cares about....Americans.

 

Sorry guys, I am awake now. Forget the above.

Jack Sheet's picture

Right on, and just look at the HUI/XAU, which have had the bollocks shorted out of them by the hedgies. But .... they may have their day yet. I'm holding on.

gwar5's picture

Manipulation investing styles can change with economic shifts but the manipulation and cheating these days is epic.  

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FoieGras's picture

Just another manager who doesn't cut it anymore. Mutual funds have closed 20 and 30 years ago and guess what they're closing today. And tomorrow still some will close as new ones get lauched.