bots, page-11

MM my friend, for some years now I have only been an observer. I wish I could help you and other genuine and honest retail investors in SEA and other stocks.

I hate bots (even though I have previously been an I.T. consultant in this area).

I have more complaints registered with ASIC than anyone.

I started the "Algorithmic Trading" forum on HC, as a warning to everyone about the threat of bots. When I did this, I got e-mails berating me from those who supported bots, saying they were simply methods for high volume trading. This was one very early simplification of bot trading. But now, things are much more insidious.

I pointed out that I had been to international conferences with virus writers now working on artificial intelligence and neural net algorithms for trading platforms - and some posters here on HC just said I was dreaming. So what can one do?

One poster said that AI and NN can not happen on the ASX because the bots are not triggered from an ASX machine. So how can you protect people/investors from themselves? There is a small bourse in the UK who control and monitor algorithmic activity, and when I said how this could be done, there was silence. Do you think the ASX or the government want to emulate that bourse?

It is almost as if some people think the ignorant and the foolish rule the world of investment (when in fact it is the powerful and the greedy).

Some of the foolish responses I have previously had actually encourage (through their naivete) companies like Lehmans and Goldman Sachs to control the financial markets. No wonder we have had the GFC. And we will probably get GFC2.

Unbelievably, there are lots of goody-two-shoes out there who think the establishment is working for them, and protecting them, and creating a level playing field in which they can invest. If you beat these people around the head they would still not understand the market mechanisms, and when they lose all their money (though it is actually stolen) they gently smile and say, well... we took a punt and lost but the government will look after us.

There are a lot of decent and honest pensioners in this country, who worked all their lives for this country, who are having their money stolen from them without their knowing. It is going to the banks, to the superannuation funds and to investment houses both onshore and offshore.

I have spoken to some of these people. They go in to see their banker who says, "we are so sorry, we have had another GFC, you have lost that $200,000 you gave us to invest for you last year".

Most of these people are over 70 years of age, and as such, they have no physical strength, or any other strength left with which to fight back. Some of them die pennyless.

Many of these old people just walk out of the bank and cry on the footpath. Some just stand there with a blank stare wondering what their life has meant, having worked 20 years down a mine, or 20 years delivering your mail. They catch the bus home and sit in the quiet, and look around themselves, and wonder which of their possessions they can sell, maybe the old coin collection, maybe the old vase that grandma gave them will fetch $40.

Do you see the directors of banks and investment companies and superannuation companies (who employ young algorithmic programmers and traders to cream off this money) going broke? Some of them like the directors of our banks get paid 5 to 15 million dollars a year in salaries (even during the year of a GFC). Others simply rig the market and when it collapses they short it and take millions in profits.

I should say that what they do is borrow your stock, and your family's stock, without your knowledge or consent (pre-collapse) and they sell it off, and then they buy it back and give it back to you when it is worth nothing. Then they invite you into the bank, into their office, and tell you that you have lost everything. Then they go out and buy their new Ferrari, go skiing in Aspen, buy a 2 million dollar home etc..

I am not saying Algorithmic trading is responsible for all this, but it masks some of it. It is a vehicle for deception and illegal activity that inevitably hurts honest and decent Australians.

Do you know that as of February 2011, Goldman Sachs of New York now employ more Algorithmic Computer Programmers than Stock Market Traders (officially reported in the global press). Have you, or anyone else here on HC, asked yourselves WHY? Goldman Sach's New York office alone employs 200 algorithmic computer programmers.

I pointed out that these companies were being charged about 15 cents or less for a bot trade, whereas I pay $19.95 for most of my trades. Do you think that is fair, when I compete with these institutions for the same stock?

I tried to get a group of investors together with a massive petition to present to the relevant minister, but not many seemed interested.

I have written to, e-mailed, and spoken with my local member about this nefarious practice.

Why is it allowed on the ASX, and why are the government not doing anything about it? Probably because the ASX is a private entity and not government controlled.

As a geek, I download all trading activity from the ASX each day. I have written algorithms to detect the probability of company ASX algorithmic activity, and these get flagged each day in my own SQL Database for me to follow up and further investigate.

I am also interested in AI and Neural Nets.

I am nothing but a normal, standard, dis-advantaged retail investor like the rest of us. However, I am willing to push the issue with governments and regulators, though it has only seemed to earn me enemies to date.

I am not sure how interested they really are. From my side of the fence, no-one seems very determined to protect the mum and dad retail investors of the world.

We need another investment platform in Australia to compete with the ASX, one that is not controlled by banks and investment funds and oligarchs, one that is created for, and run for, and controlled by, honest retail investors.

We need help.

As for me, come October 19, 2011, I am retired.

Gw

There are two things I know of that are infinite; the universe, and human stupidity. And I am not sure about the universe.
(Albert Einstein)