I happen to be the other day at the share broker's office. My folks have a few investments and they has asked me to pick up the contract notes from the brokers office.
There were quiet a few people in there staring into the PC monitor guaging if their stocks are going up or down, quiet plainly day traders who were looking at a quick buck due to volaitility in the sensex. The queer thing was there was a TV set there, switched onto the CNBC network however the TV volume was muted.
The host as well as the interviewee on the channel were quiet animated in their communications, probably each giving his take on where the markets are headed, however the people at the broking house were least intrested in what these pundits had to say.
In the 80's there were research papers theorizing that prices show too much variation to be explained in terms of the random arrival of new information. Further research also showed that if indeed the prices are more volatile than warranted then markets are being inefficient in assimilating this information.
If this is true, in an efficient market information should cancels out or should discount/account itself in the stock valuation such that volatility of demand and supply should flux prices in a narrow range, however stock prices on the other hand are moving on a much larger scale to be just warranted by future earnings or new information.
Implying that markets are truly inefficient, in such a scenario how would new information aid the investor, probably not; which could be why the patrons of the broking house were least concerned with what the CNBC show had to say. Though they may have not read these research paper, empirically I guess they may have some intuition to realise that most information out there is just noise and markets are truly volatile over a broader range.
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