You want short term trading because you want the prices to be as close to efficient as possible.
You may never trade short term but at some point you are going to buy and at some point you are going to sell. Market being far from efficient one would hurt you there.
So let them trade and discover price. You don't have to play that game but you still benefit.
Inefficient market means someone is getting a bad price. That someone is going to be a retail/naive investor - Bill and Nancy who want to invest in Apple with part of their salary.
Sophisticated investors would never be on the other side of the trade. Add to that bigger spreads and unsophisticated market participants get fleeced. As they wouldn't want to get fleeced they would hire an intermediary to do trades for them - a stock broker who again charges commission.
We already had that: spreads were bigger, prices were less efficient. The main victims were retail/naive investors and the main beneficiaries would be big institutions, brokers and sophisticated investors.
Current system benefits:
-retail/unsophisticated investors
-vanishingly small group of the best/fastest/most sophisticated traders
Who lost:
-big institutions, banks, stock brokers
-investing wannabes who no longer get access to easy money from retail/naive buyers
You seem to assume there is a pool of sharks that prey on pure souls without fast connection. It's not the case at all. Most HFTs lose money without exchange incentives which are provided because exchanges understand liquidity and low spreads are good for other participants. The pool of people who make money out of spreads/inefficient prices is way lower than it used to be as well.
The best possible world would have efficient prices every nano-second coming from god himself. Having a group of very sophisticated market makers is the second best we can have - at least if you care about normal investors who don't have resources to process all the information themselves.
For one thing because now people who own high-speed low-latency connections to stock markets have no advantage over "normal" people who actually do meaningful work, like being a policeman or nurse.
>people who actually do meaningful work, like being a policeman
Making a sudden event that happened on the other side of the world reflect in the local market price at almost the speed of light is far more meaningful work than going around shooting dark-skinned people.
If this is how people in finance think, then this only makes my point stronger. The financial world is disconnected from reality and needs to be restrained.
Yeah, it makes sense to advocate for that if you are a sophisticated trader who hope to fleece the naive retail. For 99%+ of people though near instant price discovery and efficient price is a big net benefit.
Imagine news broke that makes a company worth 15% less. Naive investors isn't aware of it and makes their bid on the market. They look at a recent price, make some offer and buys the shares now worth 15% less while bankers who were able to process the information just made a killing.
This is even worse in "slow exchanges" where participants need to come-up with bid price themselves because recent transaction price is not a relevant indicator of fair value.
If this whole efficiency argument means I'm going to make $1 more per month while some lousy traders make $100k more per month, then I'd say: to hell with "efficiency". Fairness and wealth equality are more important to me than $1.
Also considering that these traders will use their $100k in ways that my $1 will become worth even less. For example by buying all the housing in my neighborhood and thereby increasing my rent.
Without that efficiency it'd be like the old days before electronic trading where you're paying 100x larger fees to a crusty old brokerage any time you want to trade.
