Trading strategies in the internet age

[komrad]

Hi all,

Is it true that some trading strategies that worked well 20 years ago now don't work, or give much less profits, due to having many people doing the same with the advent of Internet brokers?

For example Zack's and Reuters earnings estimates have lost their snap, even Julian Robertson of Tiger Management and Michael Steinhardt, suffered severe losses in the 90s. John Templeton has had reduced earnings.

Any help greatly appreciated.

Thank in advance.

[makaro]

Hi komrad,

Yes some trading strategies have lost their effectiveness as market conditions have changed. This is specially true for systems largely dependent on measuring specific trading behaviour. It is not that they have failed but their interpretation must be taken in the context of the increasing number of players, ie, fine tune.

This is even worse for arbiteurs there was a time when big far flung trading operations easily took advantage of information asymmetry a large part of revenues.

regards,

Mark