Thanks to everyone who replied. I agree with Ed when he says "The fact is, if anyone could honestly tell you a stock that was going to go up in the next 5 minutes, they would be richer than Bill Gates!". I have always thought the same thing, while listening to these journalists/experts. Why are you a journalist if you know all these things? The same doesn't automatically apply to those selling software (and maybe not even to all those making public predictions on stock prices), and that is why I asked the above question. And another question I always asked myself is the same you just asked: why are traders working in financial institutions so bad at investing? At least here in Italy, I know that in many banks these traders are losing money year after year and consider it ok - they perform as poorly as the average daytrader in their first year of trading. In my opinion, this is because it is indeed their first year of trading. And this happens because they are not hired by managers who know anything about trading themselves, and who are picking the wrong people - graduates with good grades from good universities or people who have good connections, and neither guarantees their intelligence or their trading ability. Not only this, but they will never learn how to trade in that environment and with those restrictions and lack of freedom. So banks here in Italy right now are stuck with bad traders who are nowhere near learning how to trade. I know for a fact that most of these traders are losing year after year.
Some are but their income is not disclosed and it is distributed to many offshore companies or assets. Even if you are sure about something it does not mean you are going to profit. I tell you the story of the three eggs: While two poor guys were cursing their fate a genie appeared and said to them:"Take each three egs. Break one everytime you want to make a wish. Your wish will come true" The guys split instantly and after a few years while one was driven in his Bently around he saw the other one sleeping on a park bench. He asks him: "What happened? Didn't you use the eggs?" the loser replied: "I tried but when I got home and while trying to open the door, one egg fell and broke on the floor. I said "shit". Immediately, shit was all over the place, on the wall, on my face, on the ceiling of my home" The other one goes: "So what? You still had two eggs left" The loser goes: "I had two eggs left, but then I had to break one and wished that all shit dissapears" The winner goes: "So what? You still had one egg to make a wish" The loser goes: "I had to use it for me because I could not go to the bathroom any longer. I made a wish to be able to shit" You see travis?
I interpret that parable as "the institutions serve a good purpose in the market by adding liquity and moving prices, so traders (like you and me) can make money. And therefore, we should look the other way when things happen like: 1. mutual funds drop 50% in a year, and the fund managers didn't see 99% of the stocks all going down at the same time. 2. cat gets out of the bag that a large institution is using electronic/automated software to rake in / skim tens of millions in profits out of the market per year. X how many other banks doing the same thing! Ciao! Ed