The Traders Journal

Believe Your Eyes, Not Your Brains Ask Yourself What, Not Why

Images (2)Seventeen thousand money managers around the globe pay to use BlackRock’s Aladdin risk assessment platform to manage $15 Trillion.  Therefore, nearly 7% of the world’s $225 Trillion in financial assets are being managed by people who all ponder the markets using the same tools.  As a result, 30,000 of the world’s most significant investment portfolios are kept track of by Aladdin.  And so, by default, any flaws in the system matter to every investor, not just to Aladdin subscribers.

It is my belief that there is no professional out there who truly understands the truckloads of reports and analysis that Aladdin regularly produces.  Certainly there is no way for individual investors to do their own legwork and come up with the equivalent of Aladdin’s risk models, but I submit to you that this should never be our focus.  Instead, let your eyeballs do the work.  What matters most is not why these 17,000 money managers vote with their dollars in a particular manner.  What matters most is that we see where they are deploying their assets and what they are voting for.  Believe your eyes and not your brains.  It’s their gigantic footprints that they leave all over our charts that really matter.


 

BlackRock claims that Aladdin is designed to be “perpetually neurotic”.  It seems to me that our individual investors genie should be to create a personal orthodoxy based on a similar mantra – “perpetually neurotic and unceasingly vigilant.”  Ours is not to understand why.  Ours is to accurately see what and then react accordingly with a nimbleness and decisiveness that big money professionals can only envy.

Data from The Economist, December 7, 2013 issue.

Trade well; trade with discipline!
-- Gatis Roze

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Beautifully put. That was another way of saying one should believe what is happening, not what should be happening. Dick Knutson
Trade what you see, not what you think.
IBD talks of the importance of volume and accumulation. Your blog on Aladdin and the economist article confirms even more the importance of "V" in BATTLEV. Your lessons in your blogs are invaluable to me. Thanks
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