Posted: January 14th, 2016
The possibility of speculative bubbles in the stock market arises in part because:
The possibility of speculative bubbles in the stock market arises in part because:
- stock prices may not depend at all on psychological factors.
- fundamental analysis may be the correct way to evaluate the value of stocks.
- future streams of dividend payments are very hard to estimate.
- the value of shares of stock depends not only on the future stream of dividend payments but also on the price at which the stock will be sold.