>On Thu, 27 May 1999, Doug Henwood wrote:
>> Because in general the more people trade, the worse they do. Why any
>> nonprofessional would want to trade at 6 AM or 11 PM is beyond me.
>> Delusions of grandeur, I guess.
>
>Doug,
> If you get a chance to revisit this once, please help me
>understand the basis for your comment. I saw Paul Kangas last night
>with the head of NASDAQ say the traders would be hindered by the lack of
>information at those hours, and the transaction would not be posted until
>the next day but the growing Calif market which is active after the east
>closes is driving this change. But, beyond that, from an amatuer
>economist it does seem 24 hour trading could be accomplished with little
>problem and actually assist the process, assuming one was in agreement
>with the game.
At the micro level, performance tends to deteriorate with trading activity - as I said, the more you trade the worse you do. That's true of both institutional and individual investors. It's great for brokers and market makers, though, who earn on the churn. At the macro level, what do we have to show for the explosion in financial activity? The increase in financial turnover over the last 20 years has come along with a deterioration in general economic performance almost everywhere, whether measured by GDP growth or living standards of the median-and-below human. I'm not saying that increased financial turnover is the cause of deteriorating performance - though it sure screwed Asia over the last few years - it could just as well be a symptom. But there's no evidence that making it easier to trade around the clock will do any good for anyone but the house, which is always the case with casinos.
Doug