Re:The Reddit GME short squeeze game plan (143 days old)
by Majromax on Saturday January 30, 2021 @12:19PM
(#25970861)
> Yep, it's really great that markets can create speculation that are not tied at all to the fundamentals of a security.
To take the other side of the argument, the linked post is not about a value "not tied to the fundamentals of a security." In particular, it claims:
>> For reference: if $GME was trading at the same P/S multiple as $CHWY, the share price would be $420.
Now, this argument is wildly speculative to me, but it is in fact an argument about the long-term proper value of the company based on a fundamental.
The most recent hype train of "hold diamond hands to the moon rocket" is indeed disconnected from the value, but note that the current stock price is still within a small multiple of the above-quoted long-term level.
> If you want to trade stocks, do some research and invest wisely for the long term.
That's undoubtedly the safest advice, but this does not make short-term investment illegitimate. Stocks reach long-term value as a series of short-term movements, after all.
To take the other side of the argument, the linked post is not about a value "not tied to the fundamentals of a security." In particular, it claims:
>> For reference: if $GME was trading at the same P/S multiple as $CHWY, the share price would be $420.
Now, this argument is wildly speculative to me, but it is in fact an argument about the long-term proper value of the company based on a fundamental.
The most recent hype train of "hold diamond hands to the moon rocket" is indeed disconnected from the value, but note that the current stock price is still within a small multiple of the above-quoted long-term level.
> If you want to trade stocks, do some research and invest wisely for the long term.
That's undoubtedly the safest advice, but this does not make short-term investment illegitimate. Stocks reach long-term value as a series of short-term movements, after all.