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Has the Knight Trading Fiasco Created an Opportunity in Small/Mid-Cap Stocks?

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A COMEBACK FOR SMALL STOCKS?
DailyFeed
So how much of the valuation destruction in the small/mid-cap space since 2007 has been due to structural trading issues? This comprises everything from the elimination of the Uptick Rule to the rise of Algo trading (80% of volume on many days) to the Flash Crash, and now the Knight Capital (KCG) trading fiasco. By the way, look at the market rally since the day after the Knight news hit. It's simply huge and volumes have materially declined.

Of course, the counter-argument is that all this is just a coincidence and the decline in small/mid cap valuations has been attributable to macro-led business declines in these companies, the real estate bubble imploding, the demise of the US financial system, and now the EU's financial system.

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POSITION:  Position in DLB
TICKERS:  NYSE:DLB, NYSE:KCG   

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