Hot wok Chinese ipo Country Style Cooking Restaurant Chain Co. gained more than 50% from its opening level. You don’t want to let me and Fei Chen (who think we are good cooks) guide you about fast food joints. It hit $25 from its ipo price of $16.50 making it the third best ipo so far this year if it keeps its gains.
Your editor was a guest of Qwaffafew, the quantitative analysts’ club, to hear Steven P. Greiner, research director of Fact Set, hold forth on changes in global equity trading over the past two decades. Dr. Greiner gave a talk called “Beta is not Sharpe enough” (that’s an academic joke). He examined volatility, benchmark tracking error, value at risk, and confidence intervals in the 1990s and now. He even used student’s T distribution, statistic tool I haven’t used since grad school, in a world focused on normal curves.
At the end there was not much doubt that today as opposed to then, increased risk, correlation, and volatility, and tighter spreads, and skews (he called them “hefty backside” and “pudgy extremities”, more donnish jokes) were all making it harder to make money on global markets now. Dr. Greiner specifically noted that there are problems for small cap investors (stock pickers) like me. So I asked him what factors in the markets led to the statistical changes he had found.
Besides the fact that the world has suffered a credit crisis since 1990, Dr. Greiner cited the duality of the market. On the one hand there is a excess of short-trigger day trading on tiny incremental changes.
And on the other hand there are poorly researched “macro” trades like China or BRICs.
We try to avoid both of these hot wok excesses. More for paid subscribers from Shenzhen, South Korea, Colombia, Baja California, Canada, Brazil, Britain, Sweden, Belgium, and France.
