Yes, I realize that that is what he is saying, but I think it is a poor model of value.
Imagine a publicly traded railroad company that, early in its inception, issued press releases with its business plan to service passengers
all around the country. Now imagine that it currently it only services 57 stations railway stations, but investors know there are major plans
for expansion. The stock price for the past 12 months has been trading between $15 and $20. Suddenly the CEO announces that instead
of servicing the thousands of stations around the country, they will simply stick to the 57. Does the stock price tank? Of course it does.
But this isn't how market theory works. The markets are god, they are clarivoyent, they KNOW the outcome and this is what they invested in. They didn't invest in the promise, they KNOW the truth because they are god. The markets knew from the start the project would stick at 57 and invested as such.
Your argument is not accepted market theory and mine is based effectively on the efficient market hypothesis. It doesn't matter how butt hurt, irrational, or mistaken you and other investors are. The market knows the truth, it knows the future.
I don't really care how many books you've read on market theory -- you're just not making
sense.
Markets aren't God, sorry.
The CEO could have whacked his head on the bathtub and lost a few too many braincells,
causing him to make a bad decision.
Stocks gap up or down every day on news for a reason, which is that fundamental data
is constantly emerging. The market then tries (through price discovery) to find a stable point
value...until the next piece of data comes in and the cycle repeats.
