Justin Fox has a great little post called “How Amazon Trained Its Investors to Behave”:
Bill Ackman sure knows how to make a splash: his presentation laying out his Herbalife short is rapidly approaching 3 million pageviews on Business Insider, plus many more from his own website. What’s more, it has already made him a lot of money: even with Herbalife stock up more than 12% today, at about $33 per share, it’s safe to assume that Ackman put on his short at between $45 and $50. If John Hempton is right and the short is on the order of $1 billion, then that means Ackman has made more than $300 million in the past couple of weeks.
At some point in the next 15 months, assuming everything goes according to plan, the US government will no longer have a stake in General Motors. Treasury announced today that it’s selling 200 million of its 500 million shares back to GM, at $27.50 per share; it will then sell the other 300 million “pursuant to a pre-arranged written trading plan”. Interestingly, the news that a monster block of GM equity is about to hit the market did not have the effect you might think: GM stock is up 7% today, at $27.27.
I had a fascinating lunch, a couple of weeks ago, which lodged in my mind the idea that stock picking, at least when practiced by individuals, is best analyzed as an upper-middle-class hobby rather than as purely profit-focused investing activity. Once you start looking at it that way, suddenly a lot of behavior, which looks irrational under most lights, starts making a lot of sense.
Yesterday, ZeroHedge published this chart:
Which reminded me of this chart, which Cardiff Garcia found in August:
Both of them are telling the same story: that equity volumes, far from showing any kind of post-crisis rebound, are continuing to fall fast.