Here are two great phrases from the blogosphere of late:
"momentum ignition" ~ From a Themis Trading posting on HFT actions to trigger price moves. This type of activity has been around for a long time, but HFT takes it to a whole new level. Momentum buyers, beware. The game has changed and that move may be “carefully orchestrated.”
"the major securities analysis religions" ~ Josh Brown caught my eye with his piece on style agnosticism. The theological analogy is a good one; you often see investors blinded by their beliefs and unable to deal with even obvious inconsistencies in the name of the faith. It’s true for any of the “religions.”
We start a new year, as always, with inherited constructs. Many of them are made of found parts without much foresight. Today’s market structure fits that description, and it’s hard right now to see how to put it back together in a way that makes sense. But that doesn’t mean we should stop trying. Bold action is needed and institutional investors especially need to step up.
As for those in the grips of one of the analysis religions, a good resolution this year would be to go assumption hunting day after day. You might just find enlightenment where you least expect it.
In case you missed it: A look back at some research puzzles of 2012.