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60 Minutes / High Frequency Trading

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Last night 60 Minutes had a story/expose on High Frequency Trading showing that 70% of all the activity on Wall Street happens via computers that own shares for seconds trying to skim a penny profit before selling.

There is nothing about this that is investing – no earnings growth analysis, no balance sheet strength review, no assessment of management’s skills and capabilities – it’s all just betting on the direction of a certain stock based upon previous price patterns.

And to top it off, they show that the computers get the price pattern data faster and sooner than individual traders giving them an unfair advantage to change the course of the market before individual investors can made a decision on the news.

Honestly, this is frightening and needs to be addressed. Mary Shapiro, the ball is in your court.