In Stanley Kubrick’s “2001, A Space Odyssey” the computer takes over. There are many recent days in the stock market that it seems that has happened here too. High frequency trading and complex black box trading based upon algorithms frequently kick trends in either one direction or another into high gear. Fundamental investors do not change their minds several times during a trading session. Also, they do not create hundreds of point moves in seconds.

Computers are a fact of life in financial markets. They are not going away. They only way for fundamental investors like us to deal with this phenomenon is to stick to tried and true principals that drive value over time. Computer algorithms are designed to take advantage of opportunities that sometimes happen over micro-seconds, not years.

Over the time frames that we hold investments, growth and earnings are still what matters.

Although we don’t like the interim volatility that computer trading introduces, we are more interested in owning the right assets to benefit beyond the day to day. Stay steady my friends.

The Lonely Bull