Thursday, June 5, 2014

Quote of the Moment

"In effect, financial markets are pushing companies to run a marathon... by having them sprint every lap."
"High frequency trading is a different phenomenon from the increasing focus on short term returns by human investors. But they're borne from a similar mindset: one in which financial returns are the priority, independent of whether they're associated with something innovative or useful in the real world."
"The final destination? It will enter a world entirely of its own — a world in which it is fighting to capture value that is completely independent of whether any is created in the first place."
– James Allworth, "High Frequency Trading and Finance's Race to Irrelevance", Harvard Business Review

Yes, I've been harping on the idea that "the market" optimizes for the wrong thing for a while now.

1 comment:

Mike said...

That certainly explains the tendency of many companies/corporations to look no further than the next quarter. Not that I want to name any names, but it certainly affected the way business was done at rhymes-with-Pilldarko.