By Rob Colville on October 23, 2015 in
There’s a part of me that still can’t believe what I’m about to say, but…greetings from Malaysia! I’m sure honored and humbled to be here this week to meet with and educate aspiring traders, and I have to say, I very seldom, if ever, thought trading would enable me to see so much and travel to so many places along the way.
It’s experiences like this that make me realize that most anything is possible in the markets and in trading, even things you wouldn’t expect or dream of in the beginning or at points along the way.
Perhaps it’s understandable why I also now find myself reflecting quite a bit about some of the surprise market trends that have materialized in recent years. Much like with this trip to Malaysia, I never saw many of these coming, either, and I wonder if anyone really did? So if you’re ready, let’s run through some memories about prominent and perhaps controversial market trends from recent years, and perhaps even touch on what may be the next big bombshell to hit the financial markets in the not-too-distant future.
Bubbles, the “flash crash,” and the financial crisis: Hardly adding to the benefit or enjoyment of investors and traders in the modern era is the fact that we’re all now trading in crisis times. Gains and prosperity aside, our generation may ultimately be remembered by catastrophic market trends and events like exploding debt and real estate bubbles; epic boom and bust cycles in equity and commodity markets like gold, oil, and countless others; and even the “flash crash” of May 6, 2010, where billions disappeared in less than a second due to almost inexplicable automated selling.
Even today, many years later, constant news headlines and lingering fears about renewed financial crisis, or the next stunning and unforeseen events and market trends, typify the world in which we all now live and trade…and that’s just the way it is for traders and investors in this modern era!
Traders going “rogue”: It was—and in fact still is—one of the “sexiest” of all market trends, and the one that captivates small retail traders like us the most. Young “whiz kids” trading billions on behalf of the world’s biggest banks, some single-handedly moving markets, and earning quick fortunes in the process…or so everyone thought!
“Rogue” traders acting alone—and illegally—have cost banks billions in recent years. Just one trader cost UBS $2 billion in 2011; another, Nick Leeson, brought down Barings Bank with a $1.3 billion loss back in 1995. And then, there’s the “granddaddy of them all,” and the single biggest loss in banking history: $6 billion by “rogue” trader Jerome Kerviel while trading without authorization at Societe Generale in 2008. (Now with that in mind, tell me again why you get so angry over “by-the-book” drawdowns of 1% or less?)
Computers and Internet technology: The Internet and technology really have changed everything, and that’s a social and cultural phenomenon, in addition to being one of the most significant of all modern market trends. Just think about what it’s done for traders and the trading industry! I now have the pleasure of knowing some veteran traders who still speak of the old days of paper charts, calling trades into the broker by phone, and trading over unreliable, dial-up Internet connections, and it’s hard to imagine how they did it! Some traders probably still don’t have all the modern conveniences enjoyed by those in New York, London, Chicago, Tokyo, and elsewhere, but as a trader (and mentor) that makes my living at both over the Internet, I’ll never be one to take these breakthroughs for granted!
See also: Is Mobile Trading Right for You?
Legalized marijuana: Among the very latest market trends that many, myself included, have found to be shocking and controversial, is the move by many local, state, and even national governments who are voting to remove criminal prosecution and legalize marijuana for regulated (and taxable) distribution. This has already become a viable growth investment all its own, as seen just this past week in Canada, where the announcement by incoming Canadian Prime Minister Justin Trudeau that he and his Liberal Party will move for rapid legalization sent select cannabis stocks 25%-45% higher in only a matter of days!
Moral opposition aside, cannabis is becoming legal across much of North America, and as this continues in the years ahead, many believe it could rival or even replace biotech as the most explosive growth sector on the equity market, making this one of the key fundamental market trends to watch starting right now!
I’ll soon have to depart Malaysia and return home to my native London. Back to reality, you might say, although that’s not all bad—far from it, in fact! On this journey, I’ve made sure to take time to reflect and appreciate the opportunities I have through trading, and I suppose one of the primary messages here is to encourage you to do the same.
Day in and day out, it may not seem like much, but possibilities are endless in the markets, and as market trends and the world around us continue to change, we’re trading in exciting and unprecedented times! Just look at what’s already happened that few ever really thought possible. Now, who really knows what’s coming next, but I think we can all agree that we want to stay knowledgeable and well-funded so we can be a part of it!