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The things you say are true, but your conclusion is not quite right. Stock price attempts to predict earnings. It is never perfect or earning announcements wou
by brianwawok 10y ago
The things you say are true, but your conclusion is not quite right.
Stock price attempts to predict earnings. It is never perfect or earning announcements would never move the stock.
The fact is, if you want to know at a 1 or 2 month with window how a company is doing, stock is not the place to look
- nostrademons 10y agoSure, it's never perfect, but in context here it's relevant. Grandparent's point is that there is no evidence of a broad-based downturn in Silicon Valley, based on stock prices of major tech companies. Yours is that stock prices tend to be lagging indicators. I don't believe this is true in the general case (certainly it can be in specific ones), but if you believe that it is - how big is your short? If you believe that stock prices are lagging indicators and market consensus doesn't reflect reality, this is your chance to make money off that belief.
- tehlike 10y agoWith this logic, most of the bursts wouldnt happen, would they? In 2000 with the dotcom, why was it a bust and not a gradual decline? Same goes for 2007/8 bust. If it were not lagging, wouldnt you expect people would have realized this and bring market to its stable levels with similar shorting?
- tehlike 10y agoAlso there are various indices that try to predict market overvaluation, that seem to give red alert on cirrent valuations. The problem is, can you exactly time when it is supposed to bust? Not likely. Markets can stay irrational longer than you can stay solvent.