Over the last week the news was filled with stories of the role that high-frequency trading is playing in the markets. The conversation began with a “60 Minutes” piece on the subject last Sunday and continued from there. Once again the investing public has been whipped into a frenzy by the press bombarding them with stories about the markets being rigged and how the little guy is taken advantage of by the big guy. The HFT story is not new — nor are complaints about how these managers manipulate the markets — but now that Michael Lewis’s publisher is trying to sell books, it seems to have taken center stage. It will be interesting to watch how the story plays out.
The news about hedge funds over the last few week is the continued asset flows. Once again these investment vehicles that zig when the markets zag are now back in vogue for all investors. It is clear that hedge funds should play a significant role in a diversified portfolio and investors are pouring money into these investment vehicles. It is important for investors to understand what is happening with their money. Investors need to ask questions and get answers. They need to understand what managers are doing to generate alpha. It is all about understanding the implementation of the investment strategy. If you don’t understand that, get out of the markets – dont be fooled by performance – be smart with your investment decisions.
THINGS THAT DRIVE ME CRAZY
Starbucks has added a new feature to its app that lets users tip the barista should they feel it necessary. The theory being, I guess, that since you’re using a virtual payment system for the coffee, you should be able to do the same with tip. Really? I am mean come on! This global tipping phenomenon for everything and anything has got to come to an end. It seems that everywhere one goes someone else has a hand out. It is just ridiculous, the other day the gas attendent had a tip jar on the pump. It has got to come to end. I am all for rewarding people for good service, but I find the commonplace tip jar at the register very unnerving.