Finance sites

I finally got around to reading "Flash Boys" by Michael Lewis.   Bottom line, like a lot of non-fiction books, it is pretty good, but probably could be half as long. The basic story, in case you haven't read it is as follows {SPOILER ALERT} RBC Equity trader suspects that his trades are being front run  - someone is anticipating his moves and then picking off his juicy trades by jacking the price very slightly. After much research (using LinkedIn and experts in fibre optic cables) he figures out the problem. The fragmented nature of equity markets - there are more than 30 equity trading venues - coupled with the speed at which information flows from one market to another - allows high frequency traders to lure trades to one market then pull back depth and pick off the trade at the next market. The solution is to slow down trades RBC Equity trader quits his day job and creates a new exchange which works on the idea that by slowing down trading, you remove the advantage to ...

We're in year 6 of Warren Buffett's million dollar bet against Hedgie Ted Seides.   Buffett bet that the S&P 500 index would crush a portfolio of hedge funds hand picked by Seides. So far, Buffett is correct.  The index is stomping on the hedge funds . Of course, there's no surprise here.  If you are interested in long term capital appreciation a portfolio of indexed stocks will virtually always outperform a fund that is charging 2/20 and is run by people who think that they are smarter than the market. What's amusing is that Seides is now coming up with excuses for why it's not a fair competition.  You can read them here .  Thanks to my accounting colleague, Don for the link.