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Stocks crash on bad earnings reports because the future attractiveness of the stock has diminished. This reduces the likelihood that a future investor will buy
by orangepurple 3y ago
Stocks crash on bad earnings reports because the future attractiveness of the stock has diminished. This reduces the likelihood that a future investor will buy your hot potato above the unit price they bought in.
Stocks are fundamentally divorced from economic reality EXCEPT when a company ceases trading and several other rare administrative actions.
Predicting future hype is all that matters. Or time spent fractionally invested in all broader casino hype trains, e.g. VTI
- iraqmtpizza 3y agoWhy in the motherfuck would it be a bad earnings report when, according to this conspiracy theory, gross margins on food would have gone from 1% to 43%? Conservatively that would lead to a ten thousand percent increase in the stock price. Yet instead the stocks of Metro AG and SPAR Group, Inc. are down 25 or more percent YTD.
- orangepurple 3y agoWhat is your point? I'm saying that stock markets are driven by perceived future value rather than some economic reality.
- iraqmtpizza 3y agoearnings is economic reality and it directly, materially affects the long-term value proposition of the equity. you didn't know that?