Stock Market Revamp

While talking of stock market, I keep wondering, what does the price of a stock indicate? Does it indicate health of the organisation or it indicates what stock traders want others to believe is the health  of the organisation. 

Stock traders with lot of funds available can manage to make the stock market behave the way they want others to see it. They have the power either to raise the stock price by creating demand or make a fall in the stock price by setting up high selling spree, irrespective of the actual health of the organisation. This becomes misleading for investors who gets carried away with the flow of the market and can end up making losses. 

Is there a way to address it?

What looks to me is the problem lies in the option to bid a price for a stock. Since people have option to bid and they have funds, they can either take a price upwards or fall the price by pushing higher volumes of stock in the market.

We hear that investors do technical analysis like candle stick analysis etc. But what do they actually analyse? Are they analyzing the future performance of an organisation, whose scrip is being analysed OR are they analysing the traders' behavior in the market under those particular situations based on historical data and situations on how they/ market behaved earlier. So they actually predict the market will be driven by the traders in that direction based on historical analysis and does not predict anything about the organsiation.

What if the stocks are priced with a scrip price decided by a central agency as #SEBI or any other. The scrip price is decided based on an algorithm which factors in various financial and other performance data of each organisation. Organisations need to declare audited annual, quarterly, monthly reports to stock exchanges, as they do it today. All assets , liabilities, profits/ losses are being reported. Basis on actual performance data, asset valuation, liabilities, the scrip price can get calculated through the algorithm and is fixed for the days (until there is change in any performance data). Investors need to buy and sell based on the price fixed from time to time by the central agency through stock market. 

Organisations even today share their future business plans basis which investors need to predict if the scrip price will increase or decrease in future. Basis that analysis investors to decide if they want to buy the scrip or sell the scrip or hold a scrip today keeping the future in mind. A centralised portal can provide access to organisations to report their data points. If organisations choose to report their performance data in the portal on daily / weekly basis, the price of the scrip for the organisation can change on daily / weekly/ monthly basis. It can be decided what can be reported daily/weekly/ monthly basis which can impact the scrip price other than the regulatory reporting requirements.

This approach may drastically reduce the volume of transactions in stock exchanges as well as prevent making abysmally high profits but can protect the money of investors rather than letting the stock market being driven in the hands of some highly funded individuals. This may also help in estimation of real market capitalization value of organisations and avoid creating any hypes. Thus it can help investors with real value for money.

This is a controversial topic and hence would like to know your views in comments.