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A comment on Inflated Bond Ratings Helped Spur the Financial Crisis. They’re Back. Parent comment

Re:Inflated Bond Ratings Helped Spur the Financial Crisis. T... by kirse on Thursday August 08, 2019 @12:17AM (#20641810)
it's pretty unlikely that you have an informational edge unless you're able to pay for more data sources than everyone else and you have an army of humans looking for patterns for you

Not really. Exhibit A: Follow realDonaldTrump on Twitter. Look what happened to the SPY index starting at 13:26 EST on 8/1/2019.

[A] https://twitter.com/realDonaldTrump/status/11569794468779622...

SPY -> https://i.imgur.com/MDp7zHS.png

Even if it took you 10 minutes to decide to short the SPX/SPY on that information, a leveraged trade made plenty of money over the following days.

There is an abundance of free information available these days. To people who hone their market discernment the edge is arguably more accessible than ever.

[ Parent | on HN ]
Re:Inflated Bond Ratings Helped Spur the Financial Crisis. T... by stouset on Thursday August 08, 2019 @04:37AM (#20642800)
Why do you suppose that people managing significantly larger sums of money than you have available are not also investing based on this information? If they were, your edge would rapidly drop to zero as all of the better connected and better funded investors buy up the over/under-valued assets.
[ Parent | on HN ]
Re:Inflated Bond Ratings Helped Spur the Financial Crisis. T... by Nasrudith on Thursday August 08, 2019 @08:43AM (#20643963)
It assumes rationality not omniscience or complete understanding and the markets are a big place - not space big but still quite a lot even at the level of public news. Even then it would take time for the easy money arbitrage to stabilize.
[ Parent | on HN ]
Re:Inflated Bond Ratings Helped Spur the Financial Crisis. T... by lbotos on Thursday August 08, 2019 @07:18AM (#20643445)
In trading as an individual, you don't need to beat the big guys, you just need to hit your objectives (hedging/profit targets). If someone moved later than the big guns, but in the same direction, with reasonable risk assessment/management, then it can still be profitable.

If they moved against, and had reasonable risk management, it should minimize losses.

[ Parent | on HN ]