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I started reading the Cringley book on IBM. It's a captivating and maddening read. By this story IBM management, trying to satisfy the desires of shareholders l
by lmg643 12y ago
I started reading the Cringley book on IBM. It's a captivating and maddening read. By this story IBM management, trying to satisfy the desires of shareholders looking for earnings growth, is destroying the company.
HBS is graduating lots of portfolio managers and analysts who contribute to this phenomenon. Not so many HBS grads in HFT, based on the folks I know in the industry.
HFTs certainly aren't driving major global corporations into the ground by pushing for stupid forms of management like share buybacks, "outsourcing" core competencies, and the like.
I give this guy credit for referencing these impacts. I don't think HFT is really part of that trend at all. HFT is actually pretty benign when you dig into the details. Sure, they scalp pennies here and there, and it adds up. But the competitive pressures on technology force efficiencies to a point, which is good for the market.
- wehadfun 12y agoI agree . I am far from an expert but I did not understand the connection between HFT and companies making bad long term decisions for short term. He said himeself that HFT firms don't care about the actual companies anyway.
- fred_durst 12y agoThe author seems to expect the reader to assume that HFT does not create value. There are a few points to back up the belief but he does appear to state it more as a reminder than an argument. He then goes on to pose what I see to be the point of the piece. A question about whether the short term thinking created by shareholder pressure may be creating the same situation. Maybe IBM will never go out of business even after creating little or no value. But instead it will find methods outside of creating value in order to create wealth. Much like high frequency trading.