As reported by The Street’s Jim Cramer, you can’t stop the high-frequency traders, those who flit in and out stocks millions of times a day. You can’t end the madness of machines playing with machines, driving stocks down or up with maddening velocity.
You can’t stop them because the government has blessed them and, as Doug Kass has made it clear today, the government doesn’t care that the playing field has, once again, become unleveled because of them.
So what can we do? Not much about the machine funds. They have been legalized and just like you couldn’t take away the machine guns, the government will not outlaw the high-frequency traders or eliminate their recently blessed double- and triple-powered ETFs, even as they do nothing to help create investment capital — the real purpose of an exhcange — or allow for solid longer-term investment. They aren’t investment instruments. They are lethal trading grenades, and individuals can’t afford to catch them.
So what do we do? We find tanks that can withstand the machine guns. What’s a tank? A company that pays a bountiful dividend with more than a 3.5% yield which is so much better than what you can make with cash or bonds. And I think much safer.