Reuters calculated [1] that the average holding period for stocks is down to 5.5 months recently. See the chart on that page, it has been as high as 8 years in

Reuters calculated [1] that the average holding period for stocks is down to 5.5 months recently. See the chart on that page, it has been as high as 8 years in the past. Because of day traders and HFT, it's hard to say how long your average investor holds a stock, but it's fair to say that some hold it for a long time and others "speculate" most of the time. The speculators probably have a greater impact on the movement of a stock, but over time it must move in line with the performance of the company. The price of a stock is thought to be a "risk adjusted present value" of the underlying company. Even if you could be 100% sure a company would make X dollars per year in perpetuity, the price would not be infinite. Instead each year of earnings is "discounted" by risk, inflation rate, the cost of borrowing money, the value of competing investments, and other factors. If it was assumed by investors that Zoom would make lots of money for the next 5 years, and then make very little money, and this news meant they would only make lots of money for the next 3 years, then that will have an impact of 2 years worth of discounted earnings immediately. (of course it's not like Zoom pays or is planning to pay a dividends but there's still an underlying value, for instance they could be purchased by a larger company that does pay dividends.) [1] https://www.reuters.com/article/us-health-coronavirus-short-termism-anal/buy-sell-repeat-no-room-for-hold-in-whipsawing-markets-idUSKBN24Z0XZ https://www.reuters.com/article/us-health-coronavirus-short-...