Computers vs. Human Traders
Computers now make 50-70% of the trades on Wall Street. Since the quants have the advantage of speed, what steps can other investors take to get ahead? Can a human without a computer win?
According to 60 Minutes, the New York Stock Exchange is only a public facade. Only 30% of trades in public companies happen at NYSE.
What to Do
There has always been a small group of people who have beat the market by getting information before everyone else. Insider trading was common in the 1920s, long before computers.
History has shown that a typical investor can get ahead by employing a strategy that is not speed-dependent. Value Investing is one such strategy. Warren Buffett is perhaps the best known advocate of value investing, a strategy he learned from Ben Graham, his early mentor.
No Investing Advice Here
I am not an expert in investing and I would never try to give investing advice. But I will offer this observation: The most successful investor in the world, Warren Buffett, only uses a computer when he’s playing bridge online. When he’s investing, he uses his brain and a telephone. Computers are faster, but Buffett shows that it’s the investor who knows how to think who gets ahead.