Trading Gaps

From 50in50.substack.com

The way things generally work in liquid markets is that prices move up and down to adjust for new information along with supply and demand. Investors focus on fundamental information in the hopes that a stock price will eventually converge on their estimate of “fair value” but in the short run, supply and demand determine asset prices, not fundamentals. As Benjamin Graham said: In the short-run, the market is a voting machine, but in the long-run, the market is a weighing machine. This is a nuanced but important distinction. Fundamentals influence supply and demand, but price is a reflection of buyers and sellers ... (full story)