Tuesday, May 22, 2012

Solutions to All of Our Problems! v.4

I know the trend is looking really bad for my solutions so far, but this is it. I'm sure of it!

May 22, 2012
Traders: Not as good as they think

They believe they will do even better -- 62% of the active investors say they expect to beat the market over the next 12 months, and an additional 29% expect to match the index. (That leaves the 9% of active investors who expect to lag the market.)

Don't you see what this means? If active investors are right, then nothing needs to be done to solve our problems. We can simply let nature take its course. The trend is our friend!

Yet the Boston investment giant noted that investors opened more than 6,500 new Fidelity brokerage accounts per trading day during the first quarter, so it's also possible that some of these active investors are novices who are just figuring out this stuff.

In theory, that's 4,030 more sustainable jobs per trading day (62% beating the market x 6,500 new accounts per trading day). That's nearly 1 million new successful traders per year!

It doesn't end there though. I'm clearly underestimating the effect.

1. I'm only counting the growth in the accounts at Fidelity. There may be other investors opening new accounts at TDAmeritrade, Charles Schwab, ChoiceTrade, ETrade, Firstrade, Interactive Brokers, MB Trading, Merrill Edge, Muriel Siebert, OptionsHouse, OptionsXpress, Scottrade, ShareBuilder, SogoTrade, SpeedTrader, thinkorswim, TradeKing, tradeMONSTER, TradeStation, USAA Brokerage, Vanguard, WellsTrade, and Zecco!

2. Sustainable jobs should grow exponentially as successful traders tell two friends, and they tell two friends, and so on, and so on. Prosperity here we come!

Out of curiosity, who helped inspire such confidence?

Barney Frank (2005)

Jim Cramer (2007)

E-Trade Baby (2010)

@#$%! I really thought I had a solution this time. Back to the drawing board. Sorry about that.

See Also:
Solutions to All of Our Problems!
Solutions to All of Our Problems! v.2
Solutions to All of Our Problems! v.3

1 comment:

Stagflationary Mark said...

From the Cramer video (starting at 2:00)...

At no point is this paper worth a lot less. I don't think people realize that the whole subprime phenomena other than New City Financial has been um, rather, ah, calm.

The interviewer certainly realized something that Cramer did not. She said, and I quote, "New Century Financial?.