What Business is Wall Street In?

Re:What Business is Wall Street In? by djoldman on Friday September 21, 2012 @11:38AM (#4554169)

Please explain what you mean by "HFT works to quickly create momentum in pricing."

What is bad/wrong/unlawful/unethical about: >"And when the market is having a down day other stocks that have nothing to do with the stocks being traded are changed as well. So if the market is down someone's investment in Patrick's BCC will have a large chance of dropping as well."

And just to check: do you think it would NOT be bad/wrong/unlawful/unethical if one substituted "up day" for "down day" in your sentence?

It seems like you take issue with that fact that stock price changes have become more correlated. Is it bad/wrong/unlawful/unethical that traders may want to sell(buy) stock A when the price of stock B decreases(increases)?

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Re:What Business is Wall Street In? by lmm on Friday September 21, 2012 @01:06PM (#4554571)

>It seems like you take issue with that fact that stock price changes have become more correlated. Is it bad/wrong/unlawful/unethical that traders may want to sell(buy) stock A when the price of stock B decreases(increases)?

It suggests the market is no longer performing its intended function of allocating capital to those companies that will use it most efficiently.

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Re:What Business is Wall Street In? by djoldman on Friday September 21, 2012 @01:19PM (#4554663)

"It suggests the market is no longer performing its intended function of allocating capital to those companies that will use it most efficiently."

Please explain how the trading of a company's stock changes that company's capital allocation.

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Re:What Business is Wall Street In? by lmm on Sunday September 23, 2012 @02:38PM (#4561653)

A company's market capitialization is its capital allocation. It's reasonably common for companies to use their own stock when making big buys (such as other companies).

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