The value of a stock is not determined by the present, but by the earnings it’s projected to generate in the future. As such, stock trading is essentially a game of trying to accurately predict those future earnings. Every market player, from individual investors to major institutions, attempts to forecast this future. This collective prediction is reflected in the current stock charts – a visualization of a vast array of speculative views on future financial performance.

The stock chart represents the battleground predictions. These predictions, often hinging on various methodologies and data sources. Some of these conjectures are made blindfolded, driven by sentiment or intuition. Others are founded on in-depth market data analysis and complex financial models. Nonetheless, the future earnings of a company will always render the final judgement, validating some predictions while refuting others.

A great investor, by this logic, is one who consistently predicts the future with remarkable accuracy. It is widely presumed that institutional investors, given their extensive resources, can forecast future performance more reliably. Consequently, understanding the investment strategies of these institutions becomes of paramount importance.

This brings us to a crucial question: what time horizon should we focus on when predicting the future for investment purposes? The stock markets tend to prioritize short-term future, typically 1 to 2 years ahead.

So, what if we could develop an AI capable of predicting the future of stock markets? Theoretically, if AI can precisely predict future earnings, it would eliminate the very essence of trading – risk. With absolute knowledge of future outcomes, the market would transform into a deterministic, risk-free landscape.

Imagine a scenario where we feed the entire history of stocks into an AI, instructing it to discern patterns and develop robust if-then predictive models. Such a system could formulate its own software, a comprehensive toolkit designed to navigate the stock market’s complex tapestry of predictions.

However, such an AI would also need a deep understanding of specific businesses and industries. It’s generally agreed that the more one knows about a business and its industry, the better one can predict its future. Equipped with this understanding, AI could potentially predict future earnings with remarkable accuracy, fundamentally transforming the world of stock trading.

In essence, an AI trading tool like this could not only interpret the clash of market predictions but also effectively participate in it. But it’s worth remembering that this kind of predictive ability remains theoretical for now. As we explore this brave new frontier of AI and stock trading, only the future can tell what’s truly possible.