There is one event and one event only that investors know will happen and for how much on Wall Street; and that is the payment of a dividend. The dividend payment, amount and date are announced well in advance.
In the year after the “Flash Crash,” the response of professional investors has been like that towards growing crowds at your favorite restaurant. You want enough customers to eat there to keep it in business, but not so many that you have to wait for a table.
Back offices are notoriously the weaknesses in financial institutions for a variety of factors. The most obvious is that the back office is not a revenue producer. It does not bring in the earnings that a trader or investment banker does.
John Burbank III, founder of Passport Capital, once observed that, “There is no way you can make 30 percent a year going long on the S&P 500. If you’re going to hit that kind of return, you have to go to places where it is going to happen.”
Counterpunching is the key to success for legendary investor Paul Tudor Jones II, founder of the hedge funds group, Tudor Investment Corporation.