STREET DOGS

Watch a pro football game and it’s obvious the guys on the field are far faster, stronger and more willing to bear and inflict pain than you are. Surely you would say, “I don’t want to play against those guys!” Well, 90% of stock market volume is done by institutions, and half of that is done by the world’s 50 largest investment firms – the smartest sons of bitches in the world working their tails off all day long. You know what? I don’t want to play against those guys either. — Charles Ellis

Ellis lays out the brutal truth: investing is a rough and tumble business. It doesn’t matter where these traders work – they may be on prop desks, mutual funds, hedge funds or HFT [highfrequency trading] shops – they employ an array of professional staff and technological tools to give themselves a significant edge. With billions at risk, they deploy anything that gives them even a slight advantage. These are who individual investors are doing battle with. Armed only with a PC, an internet connection and CNBC muted in the background, [retail] investors … are outmanned and outgunned. — Barry Ritholtz

A retail trader entering the market is like Han Solo steering his Millennium Falcon towards the Imperial Death Star. For retail traders to even have a small chance of being successful, they first have to know the disadvantages that they face. — Yeap Ming Feng

“[But] most Wall Street pros have to show a quarter-to-quarter performance that keeps up with the major market indexes, and trying to beat the market in the short run produces distortions and enforces biases…. So while they might refer to individual investors as muppets, there’s little they can do that will affect the long-term returns of a portfolio of wellchosen blue chips. — Michael Sivy