Do you think you really own a piece of a company when you own its stocks? Personally, I do not think so. The stock exchange is way to disconnected from the company of the stock that is listed apart from requesting them to provide regular reporting. The prices of the stock is purely supply and demand. The market capitalization is not a real measure of the net worth of the company. It is a measure of the willingness of the market participant to pay to own the stocks at a certain point of time.
In the long term, say over 10 - 20 years, the stock prices will fluctuate resolved to the fundamentals. However, over the short term with 18 months, the price movement usually is not any reflection of the fundamentals. It is essentially a reflection of sentiment aka supply and demand.
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About Me
- ES Sei
- I'd like to share my experiences and knowledge about healthy and happy living as well as mid-life crisis. 不以物喜，不以己悲。
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