Not really. It’s based on expected future results. Sometimes that’s based in reality, sometimes it’s hopes and dreams. How else do you explain companies that have never made money being having any positive stock price?
There are no “results” just projections.
We probably agree that the stock will eventually reflect value. I think we’d quibble about how long that takes. As the saying goes, the market can remain irrational longer than you can remain solvent. In other words, don’t bet on the market always reflecting reality.
We probably agree that the stock will eventually reflect value. I think we’d quibble about how long that takes. As the saying goes, the market can remain irrational longer than you can remain solvent. In other words, don’t bet on the market always reflecting reality.