Diamonds and Dogs
Dark PoolsDark Pools
High frequency trading and dark pools have been dominating the exchanges for several years now and the machine finally took over the humans as the market collapsed at the hand of computers yesterday. With at least 75% of the trades now done through algorithmic, computer generated trading systems, dreamed up by guys we used to beat up at the playground, we are now held captive to markets that have a mind of their own. As Thursday's debacle will attest, sometimes the human touch can help us all avoid a mountain of pain. Maybe it is time to once again follow the lead of the Oracle of Omaha, Warren Buffet and remember that investors invest into real companies that have real profits that reward shareholders via reinvesting those profits or by paying cash dividends. The price of the stock really doesn't matter to the investor, unless he/she needs to sell for some reason. Turn off the TV and the computers and begin to make your shopping list of great companies that can be purchased on sale the next time the geeks let things get out of hand.