Still think TITNC3: Return of the Iceberg was peak

the CEO of Vanguard and the CEO of the dtcc probably have yacht slips next to each other.

All those guys at the top know what's happening

 

whispers on the wind in high circles.

After the last year, I don't believe anything these people do is coincidence

 

I still love you man

Goldbros gotta stick together.

 

I dunno. Part of why I have stuck with Vanguard despite their cretaceous era interface is because of their ownership structure:

https://www.investopedia.com/articles/investing/110515/who-are-owners-vanguard-group.asp

They literally have nothing to gain by ripping off their clients because they are owned by....their clients.

They probably DO know about a lot of the behind-the-scenes bullshit thought - which might be why they champion passive indexing they know the only way you can't lose is if you don't play!

 

They still participate in payment for order flow. You are the product, not the customer.

 

Yes, but again, who are those payments going to?

So last week when I narc'd up another rail of VTSAX they PFOF'd my bid out to a MM who paid them a kickback that they used to...lower my investment costs.

I agree that PFOF should be illegal, but since it ain't, I feel like Vanguard's structure makes it as inoffensive as it can be (which is not very).

 

the PFOF goes to the broker and the the flow goes to the MM. Who then see who's buying what, and they naked short accordingly. Plus you're losing money on the bid/ask as your orders are never filled as timely as someone with access to a prime broker.

As for VTSAX, yes, you buying the dip is fine, because markets trend up over time yada yada. That's not where the real money is. The real money is in the millions of trades done in microseconds using your data against you.

 

Now I gotta swap it all for silver and Bitcoin

 

No, copper and platinum.

 

PFOF is payment FROM market makers TO brokers so they can front-run the bid/ask on that order. The payment goes to the broker (Vanguard in my case).

The MM skims the pennies by matching my bid up to an ask which is a few cents lower and keeping the difference, which add up on billions of transactions and is a direct conflict of interest with the concept of "best execution". So on that, there's no argument. If the SEC actually prosecuted "best execution" violations they'd have to shut the whole thing down because everyone is fuckin' that ho in the ass.

I would argue that if that MUST be the case, at least the kickback to my broker goes to me and my fellow brokerage clients rather than private shareholders (I'm lookin at you, Schwab/Fidelity/Everyone Else).

 

Since I blundered us back into shiny yellow rocks (again), I'll just take this moment to point out that it has done exactly what it's supposed to do over the past year, being up ~13%% in that timeframe and keeping pace with inflation beautifully!

https://finance.yahoo.com/quote/GLD/performance/

 

Yes, I'm well aware of how PFOF works. I mistyped. MM's get the flow for a fee from the brokers. I don't have Vanguards balance sheet on hand, but I'm sure it makes up a reasonable portion of their yearly profits.

Does Vanguard pay you a disbursement for PFOF revenues collected, or is it far more likely that that money is going into running the business and paying bonuses. Tomatoe/tomatoh, it doesn't really matter either way.


As for the SEC. Good. They should shut the whole thing down. It's clearly broken and working towards the disadvantage of those outside the "inner circle". I'm quite frustrated with people (not you) defending this system because "that's just the way it is". Tear it down and fix it.

 

I mean, agreed, it doesn't really matter whether they pay me a disbursement, lower their fund expense ratios, decrease or eliminate superfluous fees, or pay their employees with the revenues. They have to use it for something, and since I own 'em whatever they do with it is to my benefit.

 

So boring