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Just shows how irrational and jumpy the stock market is. It’s the same company and the fundamentals haven’t really changed, but some people sold the stocks for
by whywhywhydude 4y ago
Just shows how irrational and jumpy the stock market is. It’s the same company and the fundamentals haven’t really changed, but some people sold the stocks for 40-50% less just a few months ago. Now they are buying it back.
- guywithahat 4y agoI don't know if I would call it irrational. People sold the stock because there was a fear Zuckerberg was going to run the company into the ground by ignoring their fundamentals and focusing on VR. Now we've seen their fundamental services coming back up and they've streamlined the business by firing a lot of extraneous employees. Seems rational, although I agree with calling it jumpy
- clnq 4y agoBehavioral finance explains a lot of irrational investor decisions through fear. A lot of risk aversity comes from fear, but also some risk taking (out of FOMO, for example). In specific BF terms, the gap between a rational decision and one driven by strong emotions is called the "emotional gap". Sometimes the term is also used when referring to a gap between a fundamental market value of a security or commodity and the observed market value.