Why is Small Beautiful?
I was reading something on microsatellites which got me thinking about how in the new era of investing, bigger does not always mean better. When I was looking for work in Montreal, I stumbled across a group of prop traders that really impressed me. They work for themselves, put up their own capital and trade in and out of futures contracts all day long. A few of these guys are extremely successful at this style of trading. When I inquired as to how they trade, they told me they move ahead of the big hedgies and big institutions and are able to be nimble and pick their spots. It's not foolproof and they don't always make money but they got me thinking. I could never trade the way they do and their strategy is not very scalable for institutions to replicate. Moreover, I find it excruciatingly boring going in and out of the futures market hundreds of times a day. But if you understand the constraints of prop traders, portfolio managers, hedge fund managers and institutional inves