Know Your Competition…

There is very little reason to look beyond the next quarter or next year because they are concerned with commission based activity or just trying to match the major market indices for management fees (closet indexing).

Because of the stock market’s short-term orientation, individual investors are provided opportunities in certain areas of the marketplace.

Knowing who you invest against can provide insight as to where opportunities will present themselves. Wall Street institutions and Hedge Funds dominate trading and flow of funds in the market. Being ignorant of their tactics and behaviors is sure to be a detriment to your investment success. Looking for opportunities that are caused by the short-term nature of Wall Street is ultimately a worthwhile endeavor.

Not having knowledge of Wall Street’s short-term behaviors and decision-making process is akin to entering the forest without the map.

The time to have the map is before you enter the forest.

Bottom Line: What’s good for investors is not necessarily good for Wall Street (and vice versa). The interests are not aligned properly for Wall Street to serve as stewards of long-term capital.

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