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The role of Perception, Intuition and Reason in current financial markets: is algo-trading a blessing or not?

Six months ago we wrote about the work of Nobel Prize winner Daniel Kahneman. One of his important lessons about risks was that the experience of loss is so much stronger than any benefit of profits.
It is thus surprising that many investors went on holiday without much bother over their investment portfolios while a market correction was/is looming.
Kahneman’s “ Maps of Bounded Rationality” describes the happy marriage of Perception, Intuition and Reasoning.
If algo-trading adds to the Reasoning component of behavior, one can question whether the impact of the enormous growth of electronic trades on particularly the US Exchanges was positive in terms of reducing volatility and improving liquidity or not.
When facing a market-correction this seems a relevant point to question.
Our assessment is positive. At the same time some focus on Dark Pools (trades outside official markets) may be long overdue.

Josef Do Lam joins Andreas Capital

Since mid July Josef Do Lam has joned our team with a focus on Trust related business.

Josef holds a Master degree in Business Administration from the Saarland University (Germany) and has over 9 years of experience in finance, accounting, real estate administration and in the fiduciary, trust industry.

He started his career in 2005 in Ireland with Hewlett Packard and in 2008 Josef started to work in the trust industry in Luxembourg. Before joining Andreas Capital he worked for the Intertrust Group as a Relationship Manager and was responsible for the financial administration of various client structures worldwide.