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Stock market is essentially a sentiment graph. There's no need for it to be linked to any underlying useful metric - it's entirely likely people are investing i
by freeone3000 7y ago
Stock market is essentially a sentiment graph. There's no need for it to be linked to any underlying useful metric - it's entirely likely people are investing in stocks simply because all other investments are worse.
- harryh 7y agoThis is true in the short run, but not in the long run.
- metalliqaz 7y agoI think all you're saying is that eventually sentiment bends toward economic reality.
- harryh 7y agoNo, I'm saying that eventually the value of a company is based on actual economic reality and not sentiment. Companies are either profitable or not. They either grow or not. In the end, share prices are based on these things, not just the whims of investors. The stock market is not trading in baseball cards.
- eyeundersand 7y ago"In the long run, we are all dead." ~Keynes
- kyuudou 7y agoKeynes, to my knowledge, never had children. The future for one's offspring definitely extends one's field of cares to give, in my opinion.
- jariel 7y agoObviously sentiment is a factor, but there are a million analysts with very complicated and dense spreadsheets trying to include every single detail to come up with their forecasts. It's nut just instinct.