- Earlier generations of investors were prepared to believe that the returns achieved by fund managers were down to skill. Now it has become clear that the returns were the result of factors that can be replicated. Like shoppers on a budget, investors are trading down from expensive brands to white-label goods. That may put many active managers out of a job.
This post made me think of the Radiolab episode titled, "Million Dollar Microsecond" -Have a listen if you've not already.
I'm going to pass on listening to this -- it's a super busy week -- on the grounds that I just finished Michael Lewis' book and I'm probably covered, right? EDIT: you know, I sat in an investments lecture today about HFT. The instructor knew more than could be hoped, to be fair -- middle-aged, loaded Norwegian guy, very smart, very good class -- but he was pro- ... and try as they may for bipartisanship, it's not possible for professors. 90 percent of the class was hearing about HFT for the first time, and now the only thing they'll say when they explain it to even more ignorant people is "it creates market efficiency." Shit.