Attitudes Drive Prices . . . Number of Buyers and Sellers Remains Equal

Jul 1994 //
Optimism/Pessimism

Since the number of shares sold on any given day on Wall Street exactly equal to the number shares bought, talk about there being “more buyers than sellers,” or vice versa, doesn’t make any sense.  It’s not the numbers of buyers and sellers that cause share prices to change hands at higher or lower prices—it’s the attitudes of the buyers and sellers.  When investors are optimistic, shares change hands at higher prices, and when they’re pessimistic, shares trade at lower prices.  In short, the study of stock prices is essentially the study of the economic and psychological factors that affect investor attitudes.