> Many retail investors don’t really care about whether GME’s price is justified by their corporate earnings - they simply buy at any cost. This financial nihilism - where intrinsic value is unknowable and all that matters is what other people think - is a worldview often encountered in Gen Z retail traders
The article makes it sound like as if this is a recent phenomenon. I don't believe that's true. I believe that stock prices, or prices of anything, be it tulips or paintings, have always been driven by narratives. For example, both "fundamental analysis" and "technical analysis" are just different narratives that people have bought into. They then became self-fulfilling prophecies with feedback loops due to their adoption. Some may argue "but earning reports are scientific! It's numbers!" - not it's not. There are so many ways you re-arrange, manipulate, or re-interpret these things. It's just another narrative that has been accepted by a large enough number of people.
Predicting the market has and will never be about "facts" - it will always be about predicting other people's behavior.
> Many retail investors don’t really care about whether GME’s price is justified by their corporate earnings - they simply buy at any cost. This financial nihilism - where intrinsic value is unknowable and all that matters is what other people think - is a worldview often encountered in Gen Z retail traders
The article makes it sound like as if this is a recent phenomenon. I don't believe that's true. I believe that stock prices, or prices of anything, be it tulips or paintings, have always been driven by narratives. For example, both "fundamental analysis" and "technical analysis" are just different narratives that people have bought into. They then became self-fulfilling prophecies with feedback loops due to their adoption. Some may argue "but earning reports are scientific! It's numbers!" - not it's not. There are so many ways you re-arrange, manipulate, or re-interpret these things. It's just another narrative that has been accepted by a large enough number of people.
Predicting the market has and will never be about "facts" - it will always be about predicting other people's behavior.