Saturday, November 28, 2020

Tag: Arbitrage

Pirates, Arbitrage, and the Silver Flash Crash – Viking Analytics

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by Viking Analytics, Sprott Money:
One of the quotes that guides my investment and trading philosophy is attributed to Benjamin Graham:

In the short run, the market is a voting machine. In the long run, it is a weighing machine.

– Benjamin Graham

With this quote in mind, I look for occasions when commodities and stocks have diverged from fundamental value, and seek to profit from that divergence. Often, the divergences can last longer than anyone might expect. But, that is a topic for another article.

In this article, I want to look at this quote in a specific and practical way, and apply it directly to the recent “flash crashes” that we have seen in tech stocks, gold, and now silver.