Questions 12-22 refer to the following information.
Taking Stock of Modern Investing
Time is a funny thing. Often, we can feel that we’ve been studying for hours and hours only to realize that it’s been, say, 40 minutes. Or, if we’re watching a football game, we may have a sense of constant action, 12 and that’s what sports fandom is all about. Each of these 13 is plausible when we sit and think about it: we know that “time flies when you’re having fun” and that it drags when you’re not, but some statistics about time may surprise us. If time flies when you’re having fun, what about when there’s no “you” at all, or any other human for that matter?
Increasingly, computers are running the world, and these computers operate on a completely separate time scale 14 than us. They can process many millions of operations in seconds, operations that would take us multiple lifetimes to complete. That’s all fine if the computers are doing the work of computers—making calculations, assimilating data, or accessing that data. 15 But what about when computers 16 start working in human fields and competing with the human mind?
Broader questions of artificial intelligence 17 aside; the contemporary stock market offers an interesting test case. There’s no question that the average holding period has gone down significantly since the 1950s, but a recent study has shown that the data no longer fits an obvious trend. In 2014, the average holding period for a stock in the U.S. was 22 seconds. 18 In 1920, it was even lower! Granted, the stock market has gone through some troubling permutations: many young people treat investing in the stock market like “investing” in the poker tables at Las Vegas, and people are less likely than ever to stay loyal to certain brands. 19
Image courtesy SG Global Strategy Research
However, 22 seconds is simply not a human time. That essentially means owning a stock for less time than it takes to complete the transaction online or with a broker. The number is so low because stock trading has come to be almost exclusively the 20 province of powerful trading computers, which can buy and sell stocks in milliseconds. After all, 22 seconds is the average, so if there are still some human traders keeping 21 your stocks for 10 years, that must make a stunning number of computer transactions.In the end, 22 the trend toward mechanized training is probably irreversible, regardless of what governments try to do to intervene. The question remains, though, what are the purely human activities left to us? Is there anything they can do that we can do better?