Michael Lewis went on 60 Minutes last night talking about high-frequency traders who are gaming the system and making billions. He explains it much better than me in the clip below. But first he came out and said the stock market is rigged.
What bothers me is that this is only going to add fuel to the fire of people hating on investing. People are already suspect of the stock market, even though shadiness like HFT barely effects everyday investors building a portfolio through index funds or buy & hold strategies. I'm forever shaking my head about people who automatically equate investing with Leonardo DiCaprio in the Wolf of Wall Street. I don't get the comments about how the stock market is fixed, and you should never invest because evil Wall Street brokers are going to swindle you. There is a post in this forum linking to a compound interest article filled with anti-investing pessimism. And now this Michael Lewis interview and book will make even more people avoid investing. Yes, Wall Street does have its share of corruption, but there are millions of people who've gotten wealthy fair and square, mostly thanks to patience.
I probably sound a little naive. My dad built his own portfolio over 40 years through buy & hold, and he's having a grand ole retirement. Many of his friends are the same way, and I'm trying to do the same thing myself. I just never grew up hearing this skepticism of the market, and now it's only going to get worse. This means more people lose out on building wealth because of ignorance and fear.
Here's the clip. Watch out for the bevy of Viagra ads. 60 Minutes *really* knows its audience.
http://www.vanityfair.com/online/daily/2014/03/michael-lewis-book-flash-boys-high-speed-trading
