My life as an investment professional was very different a few decades ago – before the machines won on Wall Street…
Every Monday, the portfolio managers and analysts would gather in the conference room – usually at 10 a.m. – for the investment committee meeting.
Our team managed billions of mutual-fund dollars. And our mentor, Wall Street legend Marty Zweig, was always present. We discussed the outlook for the market… relevant economic data… and upcoming reports from the government.
Almost every mutual-fund management firm held similar investment committee meetings each week back in the 1990s. This ritual carried over into the early 2000s as well.
Mutual funds dominated the stock market at the time. Behemoths like the Fidelity Magellan Fund were the 800-pound gorillas in the room… Their decisions could drive the market.
But then… everything changed.
It’s hard to pinpoint the exact time of this transformation… But sometime in the mid-1990s, Wall Street started using computers – “machines” – to execute trades. And it didn’t take long for money managers to let these machines start deciding trades on their own.
The investment committees of yesteryear soon became old news. The industry changed.
Now, it’s all about algorithms…
As these algorithms “see” orders lining up on one side of a trade, they push around the stock. And sometimes, they’re powerful enough to push around the whole market.
The machines can generate outsized moves in one direction or another. Something that starts as a minor news story can suddenly get exaggerated due to the machines’ actions.
Remember the Flash Crash of 2010?
At about 2:30 p.m. on May 6 of that year, the Dow Jones Industrial Average plunged about 9% within minutes… And then, it spiked back up again, recovering almost half of its rapid decline before the markets closed.
The machines directed that entire episode… It proved that computers, algorithms, and passive investment vehicles now dominate trading in the stock market.
This type of price action is far beyond a bunch of suits sitting in a meeting room. You might not like it… But that’s just how things are today.
These days, big bank traders can’t get anywhere near a trading desk without the help of an algorithm. And yet, most individual investors are still living in the stone age…
You serve as your own one-person investment committee. It’s like how my career started… But you don’t have the benefit of working alongside a team of world-class fund managers.
In short, the deck is stacked against individual investors like yourself.
Now, one of the brains behind the machines is on your side…
Chaikin Analytics founder Marc Chaikin ran a company in the late 1990s that traded using machines – sometimes referred to as “high-frequency trading.” He’s one of the “quants” who transitioned Wall Street from meeting rooms to mainframes.
In 2009, he abandoned his retirement to give individual investors access to the same kinds of quantitative tools used on Wall Street today. And now, I work alongside him as the CEO of Chaikin Analytics.
This might all sound like something out of a science-fiction movie. But on Wall Street, the machines won. That’s just the reality of investing today…
They look at more data than an individual could ever imagine. And they recognize connections and correlations that are too complicated for regular folks to see.
To compete against them, you need an edge. It’s that simple. That’s exactly why Marc created the Power Gauge system…
It’s the sum of his four-plus decades as a Wall Street insider. He took all the tricks and all of his experience… and created a machine that’s easy for individual investors to use.
The Power Gauge analyzes 20 different factors instantly and produces a single overall rating. It can tell anyone whether any stock in its universe is worth buying or not.
We’re living in a very different world from the early days of my career… The machines won. But with the Power Gauge, individual investors like you can still get an edge today.
Good investing,
Carlton Neel
Editor’s note: The Power Gauge is the culmination of Marc Chaikin’s five-plus decades in the markets. With just the click of a button, the system produces a daily “cheat sheet” that shows where any stock in its universe is most likely to go next. And right now, you can get a full walkthrough on how it all works directly from Marc himself. Learn more here.
