Priced in - a lesson for beginners
What does “priced in” actually mean?
When investors say something is “priced in,” they mean the market already expects it.
Example:
If everyone expects a company to report strong earnings, the stock may rise before earnings.
Then the company reports great numbers… and the stock still falls.
Why?
Because investors were expecting even better.
Markets don’t just react to good or bad news.
They react to the difference between:
What happened
and
What investors expected to happen
That’s why a stock can fall on good news and rise on bad news.
The market is always comparing reality with expectations.
