> Financial speculation is parasitic and socially harmful
Well, I can tell you from personal experience that mom-and-pop investors can't really compete with co-located HFT algorithms, and that they do seem to shift wealth further into the hands of wealthy investors (who can afford these systems).
The industry did leave a bad taste in my mouth, but I feel they perform an important stabilizing function within the markets. These algorithms tend to be based on massive amounts of historical data, so one can think of them as hyper-rational. I feel (without anything to back it up, of course), they can guard against markets going into emotion-driven feedback loops.
> I feel they perform an important stabilizing function within the markets
I'm not convinced that's true. E.g. see https://www.researchgate.net/publication/228261350_The_Flash...: "We conclude that HFTs did not trigger the Flash Crash, but their responses to the unusually large selling pressure on that day exacerbated market volatility." That doesn't sound at all like "an important stabilizing function".
Well, I can tell you from personal experience that mom-and-pop investors can't really compete with co-located HFT algorithms, and that they do seem to shift wealth further into the hands of wealthy investors (who can afford these systems).
The industry did leave a bad taste in my mouth, but I feel they perform an important stabilizing function within the markets. These algorithms tend to be based on massive amounts of historical data, so one can think of them as hyper-rational. I feel (without anything to back it up, of course), they can guard against markets going into emotion-driven feedback loops.
That said, I am a supporter of alternatives such as the Long Term Stock Exchange (https://en.wikipedia.org/wiki/Long-Term_Stock_Exchange).