Marlon Weems Of Hillcrest Strategies Shares Advice On HFT And 'Over-Thinking'

Marlon Weems is the founder of Hillcrest Strategies, which provides value-based management consulting services to institution clients in the financial services industry. Weems has over 30 years of financial services experience, which includes managing several boutique brokerages and trading operations. Weems was a special guest on Benzinga's #Premarket Prep on May 22 and shared his knowledge of trading. Jumping into it, Weems biggest piece of advice relates to over-thinking. “Sometimes as a trader you can really over-think yourself rather than coming out with a plan and sticking with it and implementing it,” Weems advised, He added that having a short-memory can be beneficial to overcome mistakes and to move forward by cutting losses when appropriate. Related: JC Parets Of Eagle Bay Capital Talks Momentum Stocks & Why A Market Correction Is Already Underway This advice, by Weems' admission, applies to a professional trader working on an institutional desk or a trader sitting at home trading their own personal portfolio of stocks. Weems explained that he was exposed to algorithmic trading more than a decade ago and made a point to invest a lot of time in researching how algorithmic trading applications function. Weems has seen his share of “fat-finger” trades, which is to be expected as there will always be errors committed as part of human nature. The conversation shifted to high-frequency trading, of which Weems has first knowledge experience. Weems explained that Michael Lewis' book, which referred to the stock market as being rigged and favors high frequency traders, is something that has been going on for some years now. “It's not really news in the true sense of the word,” said Weems, while adding that perhaps “rigged” isn't the best choice of words. “I don't think there is conspiracy out there to cheat everyone out of opportunities. “You could just as easily call this story the tale of unintended consequences.” High-frequency traders are merely taking advantage of the existing system, Weems said, and that a strong argument could be made both in favor and against high-frequency trading. Even if the government were to step in and “cure the problem” of high-frequency trading, it is possible that a new set of problems will create itself, Weems hypothesized. The topic of conversation shifted towards recent news over the Comcast CMCSA and Time Warner TWX merger and how it will affect Netflix's NFLX market share. “When I look at the Comcast, Time Warner transaction, to me it looks a lot like a cable company deal and sort of an Internet grab. At the end of the day, if this merger gets approved, which I don't personally [think] it should, Comcast comes out in the end controlling one third of the Internet traffic.” Weems doesn't imagine a scenario in which a merger would occur that would result in a lower cable bill.