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The stock market isn't predicting anything. It just believes given the current information and Nokia's decision, $NOK's value deserves to be lower now than what
by bvi 16y ago
The stock market isn't predicting anything. It just believes given the current information and Nokia's decision, $NOK's value deserves to be lower now than what it was prior. It's just a current snapshot - no indication of the company's future whatsoever.
- stanleydrew 16y agoWell technically a company's stock value is supposed to represent the discounted present value of all future profits. So you can interpret a reduction in stock price as an indication that the market expects profits to be lower in the future.
- Groxx 16y agoPR scandals do that. They also frequently have little bearing on a company's profits, unless it's sufficiently nasty to warrant significant numbers of boycotters for longer than the average consumer memory is. Stocks are nowhere near that deterministic. When people think others will jump ship, they try to jump first, to lose the least money. When people think others will want buy, they buy first or sell higher, because they can get away with it. There's more games theory than future prediction if you ignore long-term investors, as they make up a microscopic amount of the daily trading and thus the daily prices of stocks.