Thanks to Heidi Moore Markets Are Now Totally Understandable, I ‘Get’ Them, Piece of Cake

Heidi Moore explains how markets work like this:

To an outsider, financial markets seem to be about math: a wall of intimidating numbers, red and green and manic, scrolling as pundits shout on TV. But that’s not what the markets are really like at all; they’re more like debates between people who are speaking with their money rather than their voices.

Here’s how it works: investors or traders take a side on an investment — as if they’re picking a baseball team they’re going to put a lot of money on — and then compare their arguments. Do you believe Apple will overcome the doubters and the haters? Then you put money on it and watch the stock price: if it rises, people agree with you. If it falls, they don’t. Good news makes the stock rise; bad news makes it fall. If you can’t tell whether the news is good or bad, say, if an executive leaves suddenly, then look at the stock price. If it rises, that means that a lot of other people thought, “good riddance”.

I MEAN. Clouds parted. I GET IT. Reformed Broker Josh Brown writes that it is among “the greatest ways the market has ever been described.” It’s one of the only ways it’s been described to me that I’ve understood and could then explain back, so I’m going to second that. More genius Heidi-speak here. (Oh and here.)

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