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Are There Really Any Stock Exchange Secrets?Are there really stock exchange secrets? It is a good question. One that would require quite a lot of answering. Over the next few pages I shall try to pull back the curtain a little for you. The first piece of the puzzle that you need to understand is something called 'Efficient Market Theory'. This is a rather complex but ultimately simple economic theory. To paraphrase, it presumes that any and all information about a market, sector or security is known by all participants and that they can therefore make their decisions to buy or sell an asset in full knowledge of market information.
As great as this may be in theory, I think we all realise that very few (if any) of us actually know everything. If that 'everything' actually relates to a very limited sphere, one company for example, there are still likely to be very few people who know all there is to know. Depending upon the business, maybe even the company chairman does not know everything. If that is the case, what chance does the average buyer or seller of a share have?
The problem for the average buyer and seller of stocks is that there is more information available that he or she may have access to. For example, many fund managers or analysts will meet the management of which they own sizeable holdings. Though the management are not allowed to give away any secrets that the 'market' is not already aware of, could it be possible that a fund manager could get a better understanding of a business than we could from an annual report? So there might be some stock exchange secrets after all... To read more about the stock exchange, please visit:
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