eli5: before the internet how did they calculate the value of stocks?
In: Economics
An old style stock exchange was literally a bunch of people in a room with each other trading stocks in person. To some extent this still exists, the difference is you don’t need to physically be in that room anymore.
Similar to today, the value of a stock isn’t an exact science, it is based on people’s perception and confidence (or lack of confidence) in a company. All you need to know to determine the value of a stock is “what will other people pay for it” and if you get a bunch of stock traders in a room you will figure that out.
Reporting on the value of stocks was of course slower if you were not in that room, and news that could influence stock prices wasn’t as easily accessible, but stock exchanges would have access to the most up to date news they could get.
Latest Answers