Things don't have any inherent value. It is priced at a level that a buyer thinks it is worth.
replyA gallon of oil can be $3 or $6 depending on whether someone is willing to pay. It can also be $10 but only if people are willing to buy it at $10 if not "prices will come down to match the demand" - another way of saying it would be $9..$8...$7...$6 until it matches a buyer at which point gas is $6.
This is what I am trying to express. There is no "inherent price" or "inherent value" there is only the real value that it is bought at (in terms of money). There can be other values (non money) like if someone is willing to swap something for it etc.
replyThe underlying value of a tulip is the same as it was in 2000 and 2026. The underlying value of Google is much different in that same time frame.
replyThere is no underlying value. It is only how much other people are willing to exchange for it.
replySo stock marked is always meaningless except considering it is so large and consequanetial and so many people have access to it that it will be rational automagically. This is more of a belief that seems to be fairly correct than a rational line of thinking.