Yes, I have heard versions of stories about automated trading strategies perturbing the markets and producing questionable price movements. One was that, allegedly, often the Berkshire Hathaway price was pushed up when Anne Hathaway was making news and the suspicion was that news sniffing trading bots could not tell the difference ( https://www.danmirvish.com/The-Hathaway-Effect ).
If there are really such likely profit trading opportunities, a market welcomes and rewards anyone willing to risk money and to teach it a lesson; however, it also collects its fees when it teaches a lesson. It has been argued, at least for a decade (and a whole book on the subject has been written recently), that one reason why markets are hard to beat is because they are supposed to be evolving in a similar way that biological systems are supposed to be evolving (along the lines of the centuries-old proverb "the fool and his money are soon parted"). On Fri, Aug 9, 2019 at 7:59 PM Donna Y <[email protected]> wrote: > > Investigations after the October 19, 1987 crash revealed that what would > have been a normal down day in a correction that had begun in August was > turned into the heart-stopping, portfolio destroying 1987 crash by > uncontrolled automated waves of sell-programs that flooded in from > program-trading firms and overwhelmed the market. As their ‘portfolio > insurance’ protective stops were successively hit the automated sell orders > came so fast on top of each other at ever lower prices that market-makers > could not match them up with buyers. Very quickly there were no buyers > anyway, and the decline just plunged into a dark bottomless hole. > > This was the beginning of programmed trading. > > At the insurance company where I worked the investment department was not > even affected but I heard Morgan Stanley was taken on a ride by their new > program trading software. > > Natural disasters like what happened with the earthquake in Japan you > mention are not predicted but even a tweet from Trump can perturb the > market or as what happened in 1981: > > > The selling spree was set off by Joe Granville's January 1981 > newsletter, which advised investors to "sell everything". It was later > described by Business Week magazine as "a mindless wave of selling that > destroyed billions of dollars in stock value from a forecaster who drops > his pants in public to get attention." > > > Donna Y > [email protected] > > > > On Aug 9, 2019, at 7:09 PM, Jose Mario Quintana < > [email protected]> wrote: > > > > Regarding Black Monday, apparently, the ones who knew better did not have > > enough conviction to short the S&P500 in any considerable amount before > the > > event occurred. > > ---------------------------------------------------------------------- > For information about J forums see http://www.jsoftware.com/forums.htm > ---------------------------------------------------------------------- For information about J forums see http://www.jsoftware.com/forums.htm
