How stock price are set
- Stock Exchange can be represented by real buyers & sellers (SGX) or fully computerised (Nasdaq)
- Brokers are just one more layer of people between the Investors and the Stock Exchange
- It must be bear in that mind that the Investors can always set the price
- Basic theory demand & supply applies
- Stock price increase when buyers > sellers
- Stock price decrease when sellers > buyers
- Humans behaviour plays very important part
- Humans can control fear & greed but sometime the feelings can control Humans
- R-complex: Fear is actually for the good of Humans as it can (usually) leds Humans away from known dangers
- However history have many example of "bubbles" caused by fear & greed
- Tulip industries of Holland
- Dot.com Boom and Bust
