Stock price is mainly driven by the market in the short term

By | Investing

(Excerpt from Stock Market Wizards by Jack Schwager)

[Jack Schwager]: Did your economics education at Wharton help at all in your career as a stock trader?

[Steven Cohen]: Not much. A few things they taught you were helpful.

[Jack Schwager]: Like what?

[Steven Cohen]: They taught you that 40 percent of a stock’s price movement was due to the market, 30 percent to the sector, and only 30 percent to the stock itself, which is something that I believe is true. I don’t know if the percentages arc exactly correct, but conceptually the idea makes sense.

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