Wednesday, September 14, 2011
Speculative trading
I was asked whether short sales contributed to stock market volatility. My answer was "I don't know" since the research is mixed. There has been a recent paper on the New York Fed's website that links speculative trading to co-movements in global markets. Enjoy. http://libertystreeteconomics.newyorkfed.org/2011/09/can-speculative-trading-magnify-financial-market-co-movement.html
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2 comments:
I just never understood where this fits into long term investing, to me it was more like Las Vegas, betting against a company
Thanks Professor Black. Admittedly, most of the language in the article makes my head hurt, but it basically agrees with the basic logic that I suspected.
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