[...]... fashion, they manage to survive and thrive, despite seemingly poor odds Why? Because like successful investors in today’s stock market, they understand the laws of the jungle as well as the sights, sounds, and subtle nuances that signal danger and opportunity—and they act accordingly, making the most of their unique individual strengths and evolutionary advantages The New Laws of the Stock Market Jungle. .. showing for so-called amateurs Nonetheless, the same forces that appear to have leveled the field for outsiders have had a far greater impact on the mechanisms and methods of the institutional marketplace Fueled in part by the virtuous circle of investments leading to improvements that stimulate further spending, the 4 The New Laws of the Stock Market Jungle structure of the wholesale share-trading environment... Portrait of a Stock Market Bubble (Source: Bloomberg LP) of how the game was played influenced the collective consciousness during the dot-com2 days The battle cry then: Just “buy and hold” until the price of the stock or mutual fund—goes up Of course, that view proved to be foolhardy—and expensive—in the wake of the collapse that followed, and nowadays there are signs that at least some of the “irrational... share-trading arena As with crimes of violence, the horrors of war, and the various natural forces wreaking havoc around the world, these events, while terrible for those involved, often have little direct impact on most people’s lives Part 1 of The New Laws of the Stock Market Jungle reviews many of the significant developments that have affected equity—and other—markets in recent years, including advances... networks, the rise of powerful new players, the increased use of leverage, infrastructure changes, the globalization and democratization of finance, burgeoning information flows, falling transaction costs, and the dramatic growth of “alternative” investing Part 2 contains Chapters 1 through 10, which explore and dissect each of the 10 New Laws of the Stock Market Jungle Each chapter sets forth a description of. .. to really get the derivatives market going during the Bubble years—and beyond Inevitably, a range of products popped up to satisfy the rapidly rising demand Aided by a parallel acceptance of leverage and risk among an ever-widening circle of investors, derivatives have become an important fixture of the U.S equity markets—but not without controversy The 8 The New Laws of the Stock Market Jungle 1998 U.S... scrolling newswires; or email, proprietary information vendors, or the Internet, institutional operators are showered with absolute gushers of market intelligence Or, on occasion, the exact opposite, depending on the nature of the source Whatever the case, most view the data blitz as a necessary evil for staying on top of the investing game On another front, the rise of new technologies at both ends of the. .. to develop new sources of revenue in the wake of the deflating Bubble, as well as the 14 The New Laws of the Stock Market Jungle hedge fund industry’s quest to cut costs and achieve a scale necessary to boost returns from high-volume, low-margin strategies, numerous intermediaries stepped in They began offering a relatively modern form of bundled service called prime brokerage Combining back of ce support,... what goes on in the underbelly of the market, and with the benefit of my 20 years of institutional trading and investing experience, those of you with a thoughtfully constructed and consistent longterm plan will end up as “kings” of the stock market jungle Under those circumstances, the roar of success is likely to be deafening This page intentionally left blank PART 1 EVOLUTION The Modern Jungle Developments... investing seem to offer nirvana in the form of a “silver bullet,” or even a black box method for garnering outsize returns in nearly all market conditions—with little in the way of subjective input— xvii Preface Table P.1 New Laws of the Stock Market Jungle and What They Have Replaced New Law 1 Old Law INTRADAY VOLATILITY Intraday share price volatility is on In the past, wide intraday share the rise price . today’s stock market, they understand the laws of the jungle as well as the sights, sounds, and subtle nuances that signal danger and opportunity—and they act accordingly, making the most of their. those involved, often have little direct impact on most people’s lives. Part 1 of The New Laws of the Stock Market Jungle reviews many of the significant developments that have affected equity—and other—mar- kets. returns in nearly all market conditions—with little in the way of subjective input— Preface xvii Table P.1 New Laws of the Stock Market Jungle and What They Have Replaced New Law Old Law 1 INTRADAY