It’s been about two months since the release of our book, “Broken Markets”. The book started out strong and after about 6 weeks it hit a bit of a quiet period. But then the August 1st Knightmare hit and everybody wanted to find out more about rogue algorithms and high frequency trading. We are happy that our book is being used as the go to source for market structure issues. We hope it has helped stimulate the intensive debate that is currently going on between market participants about the state of our market structure.
We are not quite sure of the number of books sold (our publisher doesn’t like to tell us much) but the amount of Amazon reviews continues to rise. There are currently 29 reviews with an average rating of 4 out of 5 stars. We were honored by comments from some reviewers who learned a lot about the stock market from our book. And we were also hit with a few more shots from our critics (anonymous critics, of course). Here is a sample of the most recent comments:
August 11 from Bold Consumer: 5 out of 5 stars -“I found “Broken Markets” to be amazingly educational. I now know more about the inner workings of the stock market than I ever thought I would. I’ve particularly picked up some new terms and had some questions about the “flash crash” answered as well. The authors have put a lot of information into a book that is easily read.”
August 15 from Thomas: 5 out of 5 stars – “Something every investor, congressmen and citizen should read. For profit exchanges need to go away, the conflicts of interest need to be abolished and we need a fair and level playing field. It’s not about technology, liquidity, or cheaper costs its about fairness.”
August 15 from KnCBooks: 4 out of 5 stars – “Truth be told, most of the book was beyond my limited scope of financial acuity – but thorough re-reading got me the key points. HFT may not be the only culprit, but it is clear that the liquidity they offer is ephemeral, and at any rate is a side-effect to their function. Someone compared the Market to a casino, except that instead of the house making the rules, the high-rollers decide the winning hands. The trust that the average American once had in their financial institutions (including the market) is fast disintegrating. “Broken Markets” gives a clue as to why.”
And just to make sure that you don’t think we are cherry picking the reviews that we share with you, here is one of our anonymous critics unleashing an attack on us:
August 15 from GX: 1 out of 5 stars – “Saluzzi & Arnuk are talking their own book… they happen to be better at being part of the lucky sperm club and running a company around a cluby old boy’s network of phone based trading. Better, faster, smarter firms are competing with them and have been taking the lead for several years. Perhaps neither style is full of rainbows and smiles… but the stock market in this same period of time has veered to support a meritocratic system where the firms that work the hardest and are the smartest have an edge. Readers should know that Saluzzi & Arnuk are entrenched industry players and are the far far far from being neutral investigative reporters or commentators.”
We would like to thank the first three reviewers for their kind and thoughtful comments. As for our new friend GX, we would like to take a moment to respond to him or her.
GX, we are sure you are a very hard worker. You probably stay up all night writing code while trying to figure out ways to shave a microsecond off of your executions. You probably think that you are a capitalist and that creative destruction has worked. You probably think that you are better than us old fashioned traders because you may have figured out that in the data feed that the you buy from the exchanges, there is a little known flag that helps you identify those slow, institutional algo orders. You think that you have revolutionized the stock market and that you are a liquidity supplier that the market needs. You have convinced yourself the you have made the market more efficient. And you probably hate the fact that Saluzzi and Arnuk are getting all this attention.
GX, while you and your buddies in the HFT world were busy shaving microseconds and counting profits, that you scalped from real investors, you forgot about the real purpose of the market. You got greedy and never gave anything back to the market. You failed to realize that the cash machine you thought you created might actually run out of cash one day. And now the public and regulators have seen through your weak defenses of shrinking spreads and adding liquidity. You have lost the public relations battle even though you continue to trot out academics like Burton Malkiel to defend your practices.
We never claimed to be investigative reporters. I think most people know that we are institutional agency traders (says so right there on the inside jacket of the book). Our job is to help protect our clients order flow from getting caught in the traps that guys like you set all day. We are in this for the long haul and want our equity market to return to its true purpose of capital formation and allocation. And if that is considered talking our own book, then absolutely we are talking our own book.