

Computers are the new Dumb Money - jeffreyrogers
http://thereformedbroker.com/2015/08/27/computers-are-the-new-dumb-money/

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BetaCygni
1) Yeah because humans behave rationally.

2) If your algorithm does not take the value of the holdings of an ETF into
account you deserve to lose money.

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Eridrus
> 2) If your algorithm does not take the value of the holdings of an ETF into
> account you deserve to lose money.

Even if there is a large discrepancy between the value of an ETF and the value
of the holdings, it might still make sense to sell if you expect the value of
the holdings to plummet further, and the mismatch to go away by the value of
the original holdings tanking, rather than the ETF rebounding.

Maybe an intelligent trader could try and arbitrage this somehow (maybe
buy/hold ETF, and short underlying assets), but your trading platform would
have to have some form of extra option besides buy/sell a given ETF.

