So therefore, major equity movements are resultant from new information being introduced to the market. My question would be over say a 100-year horizon would that be the explanation for major equity movements, positive/negative information being introduced to the market? Overly simplistic and I can clarify if needed
Broadly, yes. New information. But as Fischer Black notes, not all information is valuable or useful. So if people act on that, there can be noise as well.
So a financial crisis is a “simple” case of information being incorporated into prices - it may well have been available but not incorporated. Is that a fair assessment?
But what about traders comment that we’re seeing 1 in 200 price variations more frequently than they would expect?
So therefore, major equity movements are resultant from new information being introduced to the market. My question would be over say a 100-year horizon would that be the explanation for major equity movements, positive/negative information being introduced to the market? Overly simplistic and I can clarify if needed
Broadly, yes. New information. But as Fischer Black notes, not all information is valuable or useful. So if people act on that, there can be noise as well.
So a financial crisis is a “simple” case of information being incorporated into prices - it may well have been available but not incorporated. Is that a fair assessment?
But what about traders comment that we’re seeing 1 in 200 price variations more frequently than they would expect?