> But a lot of people, without knowledge of finance or economics, want to know why stocks moved. And so, we have an entire industry reporting on a daily basis, without any direct knowledge about the thing they are reporting about !
They move due to information about the stock and the perception (which is a type of information) about the stock. But since you don't know when new information about a company/stock will become public, nor when the perceptional information about it will shift, the changes are effectively random:
And if there is new information about it, those that get it first (unlikely to be you) will be able to capitalize on in better; and as it spreads that information will take more and more of an effect on the stock price. To paraphrase William Gibson: the information is already here, it's just not evenly distributed.
They move due to information about the stock and the perception (which is a type of information) about the stock. But since you don't know when new information about a company/stock will become public, nor when the perceptional information about it will shift, the changes are effectively random:
* https://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street
And if there is new information about it, those that get it first (unlikely to be you) will be able to capitalize on in better; and as it spreads that information will take more and more of an effect on the stock price. To paraphrase William Gibson: the information is already here, it's just not evenly distributed.