I wanted to write a little bit about the price action here, which is downright soporific. In 15 years of doing this, I have a tough time remembering a period of time that was more boring, with the possible exception of early 2006. But today is worse, because volumes are so very low. You'd think that, with the stock market on its all-time highs, the broker-dealer business would be swimming in cash. There is nothing further from the truth.
I had a discussion with a client yesterday, a hedge fund manager, who told me that his performance was good, but that he had paid 20%-30% less in commissions year-to-date. And I think that experience is pretty common in the "fast" money world, except that it isn't a fast money world anymore. Trading volumes are down and the average holding period is up. Hedge funds have gone from being swashbuckling day traders to sober risk managers doing Buffett-like buy and hold stuff. I'm exaggerating a little, but not by much.
Of course, 1) none of this should be a surprise and 2) isn't this what we wanted? Let me explain. When high-frequency trading began to consume most of stock market volume, it became exceedingly difficult to make money day-trading. Computers are very good at extracting short-term profits, but they are very bad at extracting long-term ones. It made sense for people to leave the short term to the computers and, instead, focus on the long term. It has taken about five years, but people are finally starting to get the joke.