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This reminds me of the NYTimes article showing that cumulative stock returns from 1993-2018 were flat if you only looked at daytime trading hours. Most of the

This reminds me of the NYTimes article showing that cumulative stock returns from 1993-2018 were flat if you only looked at daytime trading hours. Most of the stock gains actually occurred when markets were closed, and the alpha is sucked up by extended hours traders (mostly non-retail): https://www.nytimes.com/2018/02/02/your-money/stock-market-after-hours-trading.html https://www.nytimes.com/2018/02/02/your-money/stock-market-a...

anonporridge 4y ago
A similar thing is happening now with private equity. The common case these days is to keep a company private for as long as possible, relying on private investment to grow huge. Only once you've maxed out rapid growth do you go public. Rather than going public being something you do to raise capital and keep growing, it's primarily something you do cash out and dump your shares on the plebs who are left holding the bag on a stalled out or even potentially a dying company. As in the off hour trading, insiders and rich people capture most of the gains. This is why actively trading to try to beat the market as a part time hustle is purely a suckers game. The game is entirely rigged against retail traders.
- legutierr 4y ago
  This may be happening, but the reason it is happening is that Sarbanes Oxley made it such a burden to run a public company that companies that otherwise would have gone public began to seek capital in the private markets instead. Regulation protects retail from making money as much as it protects retail from loosing money.
323 4y ago
> and the alpha is sucked up by extended hours traders That's a bizarre claim. If I buy and hold for weeks/months/years, no alpha was sucked from me. If I day-trade, well, I get what I deserve if I have no edge or don't understand how the market works. And extended hours trading has minimal liquidity, just because AAPL jumped 10% in after hours doesn't mean someone made billions entering/exiting during this interval, because it's just the market makers repricing minimal volumes.
__derek__ 4y ago
It makes sense that price changes happen outside normal trading hours: public stock markets are regulated such that news is supposed to happen then.
mikestew 4y ago
That’s exactly the opposite way I read the article. “Simply holding shares while you sleep will do it. So for buy-and-hold investors, these findings are particularly encouraging: Get your rest, ignore the temptation to trade and you can do just fine.”
isaacfrond 4y ago
Interesting https://archive.ph/fxMAt https://archive.ph/fxMAt

anonporridge 4y ago

A similar thing is happening now with private equity. The common case these days is to keep a company private for as long as possible, relying on private investment to grow huge. Only once you've maxed out rapid growth do you go public. Rather than going public being something you do to raise capital and keep growing, it's primarily something you do cash out and dump your shares on the plebs who are left holding the bag on a stalled out or even potentially a dying company. As in the off hour trading, insiders and rich people capture most of the gains. This is why actively trading to try to beat the market as a part time hustle is purely a suckers game. The game is entirely rigged against retail traders.

legutierr 4y ago
This may be happening, but the reason it is happening is that Sarbanes Oxley made it such a burden to run a public company that companies that otherwise would have gone public began to seek capital in the private markets instead. Regulation protects retail from making money as much as it protects retail from loosing money.

323 4y ago

> and the alpha is sucked up by extended hours traders That's a bizarre claim. If I buy and hold for weeks/months/years, no alpha was sucked from me. If I day-trade, well, I get what I deserve if I have no edge or don't understand how the market works. And extended hours trading has minimal liquidity, just because AAPL jumped 10% in after hours doesn't mean someone made billions entering/exiting during this interval, because it's just the market makers repricing minimal volumes.

__derek__ 4y ago

It makes sense that price changes happen outside normal trading hours: public stock markets are regulated such that news is supposed to happen then.

mikestew 4y ago

That’s exactly the opposite way I read the article. “Simply holding shares while you sleep will do it. So for buy-and-hold investors, these findings are particularly encouraging: Get your rest, ignore the temptation to trade and you can do just fine.”

isaacfrond 4y ago

Interesting https://archive.ph/fxMAt https://archive.ph/fxMAt