Share price

This practice has its basis in the presumption that investors act rationally and without biases, and that at any moment they estimate the value of an asset based on future expectations.

Researchers have found that some of the biggest price deviations from random walks result from seasonal and temporal patterns.

Observers have noted these effects in many different markets for more than half a century, but without succeeding in giving a completely satisfactory explanation for their persistence.

Technical analysis uses most of the anomalies to extract information on future price movements from historical data.

[2] But some economists, for example Eugene Fama, argue that most of these patterns occur accidentally, rather than as a result of irrational or inefficient behavior of investors: the huge amount of data available to researchers for analysis allegedly causes the fluctuations.

When viewed over long periods, the share price is related to expectations of future earnings and dividends of the firm.

Berkshire Hathaway has refused to split its stock and make it more affordable to retail investors, as they want to attract shareholders with a long-term vision.