Monday, July 05, 2010

"Traders and financial engineers trade on every piece of data. Those that work from quantitative formulas that drive trades based on data input. Not a single one of them acts like a shareholder. And that is the reality of the stock market. The market is no longer driven by shareholders. The market is driven by formulas that drive trades...The stock market today is dominated by financial engineers and traders. Institutions who look for the loopholes and exploit them. Thats not a bad thing. There will always be loopholes, and they will always find them. But at least with the tax, when they do, we are protecting ourselves a little bit..."



"...Just as hackers search for and exploit operating system and application shortcomings, traders do the same thing. A hacker will tell you that they are serving a purpose by identifying the weak links in your system. A trader will tell you they deserve the pennies they are making on the trade because they provide liquidity to the market. The important issue is recognizing that Wall Street is no longer what it was designed to be. Wall Street was designed to be a market to which companies provide securities (stocks/bonds), from which they received capital that would help them start/grow/sell businesses. Investors made their money by recognizing value where others did not, or by simply committing to a company and growing with it as a shareholder, receiving dividends or appreciation in their holdings. What percentage of the market is driven by investors these days?"



-- Mark Cuban, Tax the Hell Out of Wall Street and Give It to Main Street and What Business is Wall Street In?


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