Great post Andy.

I am always amazed at how much info people give up and at the same time
blame other, (mainly GS), for their losses.

I am much mopre interested in getting better at trading

How can I achieve this? How can I trade more like an informed professional?
What can I do to get on the RIGHT side of the trade?

New book out by Goldman Sachs CEO "How the Rich Get Richer" Chapter One: Just wait until you see our 3rd quarter....

Would that it were that simple. If Goldman--or any other bank--is frontrunning the investors that allow the entire market to exist, then they are damaging markets in order to turn profits. This kind of self-destruction can't sustain them (or the markets) indefinitely, and it is only lack of regulation that allows it to exist.

I win some, I lose some. I whine some, and I make some really great points too. I am learning, and practicing, and researching. But I will never colocate my server at an exchange and probe the market with instant-cancel trades, I will never be given a rebate on every trade regardless of the quality of liquidity it provides, and I will never have billions of dollars (including 20 bil or so from the taxpayer) to throw against the wall and see what sticks, purely in the name of profit.

I personally prefer a market that people working actual jobs (as opposed to useless traders like me), and making actual things (not money) to earn their salaries, wish to participate in, as time and savings allow. I don't prefer it because it makes my trading easier, but because it is a sign of a healthy and robust free economy. The market I see today is not that one, and I don't think that everyone adopting the same self-serving your-heart-on-my-plate attitude is a step in creating it.

This demonstrates a misconception I've seen in many, although largely not those who are actually in business. Why the prejudice against services (yes, even trading?). Making "things" is quickly falling down the value chain, if you haven't noticed. That's why it's leaving the country -- there's no margin in it.

Of course, it sure doesn't help when your Congress is inveighing against keeping manufacturing in this country by unilaterally making it more expensive to build "things" here, thanks to higher tax plans and now some poorly researched cap & trade scheme.

That said, the important thing -- as it has been since the dawn of Man -- is the ideas, or the IP if you will. Even at the start of the industrial revolution -- when we first started making "things" -- the idea of the cotton gin was thousands of more times important than the actual fabrication of one. That's all outsourceable.

As long as we maintain our status as the #1 idea generator, then you need not worry about Goldman creating better ideas about trading (although I share your view of bailouts), and other service-oriented businesses. Far more you should worry about our political system squashing innovation via group grabs of innovative industries and poorly planned tax policy.

Ask yourself, for example, who will have incentive to create value in the biotech field if the government becomes the only payor for such services?

Some, perhaps. But "Fewer" definitely.

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Sorry, I should have been clearer. By "things" I was not referring to traditional manufacturing, but to creation of stuff that isn't money out of money. Services, ideas, whatever, doesn't matter to me. Sure, I think the globalization of manufacturing and agricultural is overblown, and depends on cheap energy that will not be with us much longer, but that's a separate argument.

Our number one product--as of 2007 GDP, the last time we looked any good--was financial services. We manufacture shareholder value now. And the frontrunners see an opportunity to pick off even that. It's a downward spiral, having little to do with government in my book (though we've got some big debt problems coming), and everything to do with privileging greed over useful innovation. Financial products do not enhance capital, and frontrunning or HFT or what have you does not enrich liquidity.

Forgive me if I seem skeptical, but whenever I see phrases like "privileging greed" my antennae go a-vibrating. What do you mean exactly? If you are inferring corruption, or lawlessness, then I'm with you. If however, you are contending that innovation in financial products (like innovation in any products) is a bad thing, I'll have to disagree quite strongly.

And a fall-back to the term "greed" is not going to sway the argument, as I fear it could be inserted into the age old saying reserved for the fascists --- "When they called the financial products innovators greedy, I remained silent, and did nothing..."

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I didn't think I was making any strange claim that the facts of our recent economic history (or indeed investment-banking practices right here and now) do not readily support. If greed is an icky buzzword to you, replace it with "risk". I prefer to go straight to the source, as the one underpins and encourages the other, and the opposite of both in my book is still "prudence", which financial institutions keep promising to demonstrate and keep failing to deliver.

As for innovative financial products, we'll just have to agree to disagree. I do not believe that complex derivatives (CDSs, CDOs, etc.) have added any value to the broader market; Their entire existence thus far--again, this is common knowledge--has proven only to encourage risk while pretending to package prudence. They have destroyed far more than they created.

This may wander slightly afield, but I think these rough times have created a great opportunity to rethink what value is and how we should create it, especially because the financial industry has destroyed so much of it, taking the economy along for the ride, and paid little price. Absent a scapegoat bank or two, they have surrendered no value, and show no signs of planning to do so, despite having destroyed so much of it. I'm not sure we've taken advantage of the opportunity, and thus I firmly believe we'll have a fresh chance soon.

But to generalize grossly, I believe the union set of true innovators and investment bankers to be quite small. (You can substitute "thing"-making companies and investment banks into that statement if you like.) Having spent plenty of time working alongside both I may be anecdotally biased, but I would still rather live in a world full of the former and free of the latter.

Personally, I would rather lay the blame at the feet of the federal
government for its role in artificially and unsustainably propping up the
value of these instruments (and their underlyings) in the name of
"affordable housing", rather than blame the instruments themselves.

How is front-running self-destructive to insiders?

i agree with your points.. but you must agree market liquidity would be nothing if goldman and schonX and credit suisse stopped the programs. I post on twitter but i post what i see and somtimes what i think but not what i want to see. I like your bantor... as a fellow stately neighboor. i was raised in Evansville i repect whats coming out of Louisville!

I was Evansville North 95!

No way. I am Harrison 2002. I thought I was the only one 2escape the grips of evv.

You guys were probably just not "German enough."

That usually necessitates being kicked out of the Village.

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I'm sick of you talking trash about me Swan! I only post my exits so people see the whole picture since I'm trying a crazy idea to get people to invest with me. If its only my own money or my own trades there would be no reason to do that.

But enough of your endless posts that only focus on me. I've had enough.

lol

I was watching BBC World News last night. The anchor was so whiny on how unfair it is that Goldman is making all this money while the rest of us are suffering. Using their rationale, I guess it would be better is no one was making money right? Ridiculous.

NO, but not make free money with my tax money. I am very good at trading but I lack the billions of free government money, my ante is puny.

I like this. I do, however, wish to know the "inside" information (if that exists). By inside information I don't mean insider information, I'm referring to the tricks and tactics of pro-fund traders (the guys who trade large dollars everyday). I realize they make and move markets intentionally, but I hardly believe they have tactics that the individual trader cant' use. I'm sure they don't want to reveal their game, but someone out there must be willing to tip the scales a bit.

Agree. And yes, scales can tip in your favor. It's not that difficult
it's just extremely counter-intuitive.

but i don't wanna stop complaining. those gs guys are mean! they hurt my feelings!

i'm gonna go tell mom.

Lol