by Marc Usem
We are often asked to explain why certain asset prices increase and others decrease. Since the presidential election, these questions have only become more frequent. So, why did prices of stocks go up following the presidential election? The simplest explanation was given by famed investor Howard Marks, who stated that the reason that stocks go up is that there are more buyers than sellers. Likewise, asset prices decrease when there are more sellers than buyers. While this answer may seem flippant, the basic relationship of supply and demand actually does a better job explaining price movement than the reasoning by many journalists who ascribe a myriad of other factors.