Stay focused on the big picture

In today’s modern world, speed and ease of use are essential for quality of a service.

Consider online banking or brokerage accounts.

The ability to get transactions done quickly and securely, obtain accurate prices, and have lasting records, make a major difference in terms of how the service might be evaluated by its users, in my view.



Speedy Service

If a large bank doesn’t allow servers to get access when and how they want it, they find somewhere else to go.

One might think the quickness issue would spill over into investment decision making, especially with algorithmic trading also being popular.


Time Horizons

I would argue, as does hedge fund investor Bill Miller,  (the only money manager to beat the S&P 500 fifteen years in a row), that the longer one goes out on your time horizon, the more investing opportunities there are.

Here’s how Miller puts it:

“Time arbitrage just means exploiting the fact that most investors — institutional, individual, mutual funds or hedge funds — tend to have very short-term time horizons, have rapid turnover or are trying to exploit very short-term anomalies in the market.

So the market looks extremely efficient in the short run. In an environment with massive short-term data overload and with people concerned about minute-to-minute performance, the inefficiencies are likely to be looking out beyond, say, 12 months.”


Note that the key word here is eventually.

One cannot ignore the issue of speed in the markets.

In today’s world, everybody knows everything immediately, no matter how small or trivial the information may seem.

Given the level playing field with data, in my view, having a long term perspective can be an advantage, depending on the quality of the decisions you make.

Photo Credit: Will Power via Flickr Creative Commons