Google "price discovery". The amount of people buying, selling, betting on, and betting against a stock (volume and derivatives volume) influence the stock's price. So a hedge fund can look like a hundred thousand regular joes. It's not hidden, secret, subversive influence. It's just a bit subversive.

There's market oversight but it's a joke in some ways. Google "failure to deliver" and "synthetic shares" for some of the latest stuff. There was a way to be sure stock was legit, then there wasn't, then there was, kinda, but we sacrificed that for liquidity (the ability for people with an interest to make an exchange with fewer impediments and less time lag).

If your expectation and reality don't align, like a late bus or dinner plans, you instantly assume it's your fault, you made an error, and you're less than normal people who can manage their time and pl- oh wait, the bus was just late but here it comes.

Better q for explain like I'm five. A hedge fund combines the assets of investors and make gambles, but like... when you're big enough you can kind of throw your weight around. If Berkshire Hathaway likes a fund that might make it go up anyway. If hedge funds gather like vultures and bet on the death of a weakening company they might die faster. So it opens options a retail investor doesn't have.

Ostensibly the people in charge are mucho smarto, but often buying an index fund would have been better or just as good. Depends on if the major incidents were predictable (recession because employment numbers for last two years, or recession because COVID/aliens/civil war in Sweden?), and if hedge fund managers predicted it early enough to be ahead of others, and if they did it in a way that other factors don't muddy the waters.

My corporation split in two, once. One of the companies was more like supply chain and the other was more dependent on energy industry trends. Investing in what we used to be would have been fine. We went up. But if energy went sharply up we went a bit up, and if supply chain stuff got tough we only went a bit down. Now you could make a purer bet on a single trend without having to consider the other impacts as much. Things like that.