The theory put forth by financial economists, and for the most part investors, is that the value of a firm, and hence stock price, is the present value of expected future earnings. If this is correct, provide three reasons why the stock market, and hence stock prices, are so volatile (By that I mean: Why do stock prices move around so much. For example, take any random stock and look at its price movements over the past year, or any year. In many instances the stock price will move at least 50% from high to low over any, and every year). More specifically, what about the idea of estimating the present value of expected future profits makes prices so volatile (maybe I should just be using the word variable instead of volatile)?