I often picture price as a giant tornado-like tunnel. At the top of this ferocious, whirling mass of energy are global events and our reactions to them. The vortex spins with supply and demand levels, interest rates, and cyclical industry shifts. Further down, analysts reports, company earnings, and the public s take on sectors and leading equities revolve in a constant pirouette. All elements of this mighty maelstrom converge into a single point.
Price is the consensus of opinion in a single moment.
For example, you want to sell your current holding in Wonky Wireless. I want to buy shares of Wonky Wireless. So we exchange equities for money. Once again, shares and money change hands at the new price. I buy your shares, because I believe the value will increase.