HFT has Bugattis; We have a Deuce Coop


We first featured on our blog the wisdom of investing great Leon Cooperman back in in early December 2011, when he appeared on CNBC’s Fast Money midday segment with Scott Wapner. Back then he treated us to this jewel of a quote:

The high frequency traders are turning the best capital market in the world into a casino, and they are scaring the public, and it is not in the public interest.

Late yesterday just after the market closed, he graced CNBC again, as he was interviewed by Maria Bartiromo. He started the interview with the following comment:

Let me wish you well in your new home – the New York Stock Exchange, the bastion of capitalism, where 70% of average daily trading volume has nothing to do with investing, but all to do with High Frequency Trading which we should outlaw, and the slicing and dicing of ETFs.

 He further advocates bringing back the uptick rule. Mr. Cooperman believes that the elimination of the uptick rule is something that has exacerbated volatility (think Fall 2008, Spring 2009, Spring 2010, Fall 2011), has scared investors, and has really only benefited one group: the stock exchanges’ largest customers – high frequency traders. See Coop’s interview with Maria here.

We will caution anyone who thinks Mr. Cooperman’s thoughts are those of an extinct dinosaur, and worthy of dismissal; look at his investing track record. If that record is not enough to make you take seriously his point of view of how the exchanges only cater to high frequency trading, at the expense of the investing public, please be reminded that he has remarkable company with that viewpoint:

– Jim McCaughan (Principal Investors)
– Mark Cuban (Dallas Mavericks owner and experienced investor)
– Roger McNamee (Elevation Partners)
– Michael Price (MFP Investors)
– John Bogle (Vanguard)
– Charles Munger (Berkshire Hathaway)

So if you are an investor who likes to hold stocks for more than 22 seconds, please be sure to thank each of these gentlemen for speaking out against the entrenched and conflicted Exchange/HFT relationship. And thank Coop for doing it twice.