SpecialistMan - by John Bogle
- Thread starter Tea
- Start date
The following quote is from the Seattle times article just cited:
"Specialists often make commissions for matching a buyer and seller, but the bulk of their profits come on shares bought and sold from their account. Last year, the portion of NYSE volume in which specialists acted as either a buyer or seller was 30 percent, up from about 20 percent a decade ago."
30% - what a farce. On its face, the rate of specialist participation is obscene, particularly given that liquidity has improved from a decade ago but specialist trading has risen?! Traders can get a better deal trading through the electronic exchanges of many emerging markets - try Korea, Taiwan, or Hong Kong for starters. Anyone who defends the NYSE's specialist system is either dishonest or stupid, and insults their audience.
"Specialists often make commissions for matching a buyer and seller, but the bulk of their profits come on shares bought and sold from their account. Last year, the portion of NYSE volume in which specialists acted as either a buyer or seller was 30 percent, up from about 20 percent a decade ago."
30% - what a farce. On its face, the rate of specialist participation is obscene, particularly given that liquidity has improved from a decade ago but specialist trading has risen?! Traders can get a better deal trading through the electronic exchanges of many emerging markets - try Korea, Taiwan, or Hong Kong for starters. Anyone who defends the NYSE's specialist system is either dishonest or stupid, and insults their audience.
BlueHorseshoe,
I don't consider myself dishonest nor stupid for liking th NYSE system. It's the way i learned how to make my living and i really don't see what is so dihonest about it.
I have traded Nasdaq before and i will tell you that i am much more confortable trading NYSE then trading Nasdaq, that is just me but nothing dishonest about it.
salud,
Quote from Tea:
You have done a lot for this industry, Don.
But you are a NYSE member, no?
Don't members have a vested interest in keeping things the way they are?
Thanks, but No, we are not NYSE members. We are currently Chicago Stock Exchange members (and CME). We have, in the past, moved Exchanges whenever we did not like what was going on within the bureacracies.
I want to see an excellent system continue to serve all of us. I also want to see changes made when we see violations from a few "bad apples." Just like with our beloved Country, we may not always agree on every issue, but we have yet to see any system even come close.
Another note: Members are, in fact, the "owners" of the NYSE and they are footing the bills as well. Their membership valuations could go down the tubes if those "bad apples" cause continuing problems. I think the Members should "cry out" whenever an injustice occurs (whether from a brokerage firm, an institutional trader, a specialist (who are basically salaried employees anyway), or anyone else involved. Heck we see "bad cops" and "bad clergy" and mail carriers who have "gone postal"... yet I don't think we should eliminate law enforcement, places of worship, or the postal service, at this time anyway.
Don
Now, this is quite interesting...and just to point out the irony, let me say this. The biggest outcry came from the AIG CEO who wanted More, not Less, Specialist participation on the NYSE. I think if anyone were to actually be (or have been) a trading member on a trading floor, with the responsibilities that entails, then you might see that the Specialists would much rather they didn't trade at all. I know for certain that most of their employers would certainly prefer it that way.
Don
I really appreciate this forum! I'm learning allot from the many experienced contributors, but I don't believe in labeling or belittling people for their choices.
Electronic vs Specialist system is just one small element of a traders/Investors "formula" that either spits out a profit or pukes out a loss. We (I hope) are all on a learning path & I wish everyone well even if they take a path that isn't successful. I know I've been there and wouldn't have appreciated anyone kicking me when I was down, even if it was just their ignorant oppinion of my situation. Be Cool
Two thoughts: The biggest outcry didn't come from AIG - it came from Fidelity and Vanguard, two very large firms who clearly understand their's and the investing public's interest. I would suggest that this interest is, or should be, paramount to the interests of specialist firms and the prop trading industry. I didn't see that AIG wanted more specialist participation as much as he wanted the specialist firm to hold a larger position of AIG stock as an ongoing policy. AIG was simply trying to drum up another long-term shareholder.
Of course specialists would much rather not trade at all. What you didn't mention is that they would rather not trade but still enjoy their six and seven figure incomes. The problem is that specialists serve no utility and would otherwise generate grossly insufficient profits to justify their wages. They must trade to exist.