They behave rationally... the issue, more than informational assymmetry that you note, is that they're facing Newcomb-like problems: They're betting on what oth

They behave rationally... the issue, more than informational assymmetry that you note, is that they're facing Newcomb-like problems: They're betting on what other people are going to bet on what they're going to bet on what other people are going to bet... And they're all trying to do it faster than the average participant, in order to attain advantage. Stocks aren't traded on some fundamental objective functions of accounting value and projected profits, they're traded purely on what people believe that other other people will be paying for the stock five milliseconds / five minutes / five days / five years from now. All at once, in a recursive mess. The professed theory is that some kind of objective truth underlies all this, and eventually generates some theory of value that all the speculators can latch on to - but that sort of investing is a tiny fraction of trading volume.