A friend just bought 2000$ in shares, because "its cheap right now".
The only thing the stock price reflects is how valuable the stock is. Nothing more, nothing less.
If each person of earth decided that their life goal was to own 100 nikola shares "to feel alive" or "own a piece of their failure" or whatever, their stock price would skyrocket, and stay high as long as everybody holds.
Those who value stock in terms of a company fundamentals, are making the assumption that at least most other participants in the market will value the stock in terms of its fundamentals as well.
That assumption might be true for some stocks. It isn't true for stocks that "people ""just"" like" (or dislike) and are willing to pay a premium to buy, because it has some other value to them.
The only thing the stock price reflects is how valuable the stock is. Nothing more, nothing less.
If each person of earth decided that their life goal was to own 100 nikola shares "to feel alive" or "own a piece of their failure" or whatever, their stock price would skyrocket, and stay high as long as everybody holds.
Those who value stock in terms of a company fundamentals, are making the assumption that at least most other participants in the market will value the stock in terms of its fundamentals as well.
That assumption might be true for some stocks. It isn't true for stocks that "people ""just"" like" (or dislike) and are willing to pay a premium to buy, because it has some other value to them.