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re: Recent Investing Trends(Past 5 years)

Posted on 4/19/13 at 4:22 am to
Posted by Doc Fenton
New York, NY
Member since Feb 2007
52698 posts
Posted on 4/19/13 at 4:22 am to
In the past 5 years?

The two things that most people are talking about more than anything else are (A) high frequency trading, a.k.a. algo trading, and (B) risk management measures.

For the people on the cutting edge still trying to pull every conceivable trick to capture a little more alpha, it's (A) that's the big deal. There have actually been spikes in real estate prices based on getting Internet cables closer to the trading floor (in Chicago in other places), where an extra 10 meters is actually worth lots of money.

For institutional investors and large financial firms, the biggest change in their universe over the last 5 years has been all the regulatory compliance shite they have to deal with, and a huge part of that relies on Value-at-Risk and similar risk measures that are mandated by regulatory bodies. See also insurance and reinsurance firms.

Back 5-10 years ago, it was the slicing and dicing of asset backed securities that was a big deal, and 10-20 years ago, it was alternative investments by big endowments into venture capital, hedge funds, private equity, etc., that was a big deal, but both of those things have been relatively cold the last 5 years.

There are always new computational methods being devised for equity derivatives traders and professional portfolio managers, but nothing really revolutionary has happened in the past 5 years there. Just some modest incremental changes, although for the derivatives people, everybody is more interested in extreme value theory and outliers, but really, that just gets back to VaR and TVaR.
Posted by Chris Farley
Regulating
Member since Sep 2009
4180 posts
Posted on 4/19/13 at 4:41 am to
quote:

high frequency trading


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