How increases in computing power have driven higher share turnover

MOORE'S Law, an observation that the "number of transistors incorporated in a chip will approximately double every 24 months", has held broadly true since the creation of the first transistor in 1947. Computing power has increased some 600-fold over the past 15 years; 2.6 billion transistors can now be crammed onto a single computer chip. This advancement has facilitated the ability to trade ever-larger volumes of shares. During the 1960s, just under 17 billion shares were traded on the New York Stock Exchange. That amount was surpassed over just four average trading days in September 2011. And while the number of shares listed has increased by some 50-fold, annual share turnover has increased from an average of 17% in the 1960s to nearly 300% between 2008 and 2011. In theory all this activity ought to lead to more accurate pricing of stocks and more efficient allocation of capital. In practice there is a lot of tail-chasing going on. That has led to calls for a tax on financial transactions, the Tobin tax, which advocates argue would be a painless way of boosting government finances.

Note: To get to the actual underlying number on the scale, just add zeros according to the number after the "1e+". So 1e+6 = 1,000,000 = 1 million