The blow-up of the Archegos fund has many important lessons, here’s just one

If you are new to markets you will likely get pulled into a shit rabbit hole about how the ‘big boys’ know everything that’s going on and are using the information to target you, specifically.

Which, if you think about it, is absurd. On many levels. 

I found this little bit in a Wall Street Journal piece on “The Archegos episode”, its worth reading and taking on board. Bolding below is mine.

  • The Archegos episode is the latest in a long history of blowups to reveal that while Wall Street banks bill themselves as second to none in gathering information relevant to investing, they often struggle to know what is going on next door. That shortfall is germane to the Archegos liquidation because it seems clear that the banks didn’t realize until too late that they were holding similar positions, with malign implications for efforts to keep markets in those shares from falling further.
  • “You can have a suspicion that maybe this person is doing this trade with a bunch of other people,” said Jay Dweck, a former trading and risk-management executive at Goldman and Morgan Stanley and now consults for banks and hedge funds. “But no one knows the aggregate.”

Its a very fair assumption that larger players in the market do know A LOT more than you. 

But, they know everything and are responsible for every little wiggle in markets? Nope. Wrong.

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