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by crazygringo
2382 days ago
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It is hypothetical, because you're ignoring the other side of the equation: all the sophisticated investors (hedge funds etc.) who detect that stocks are temporarily propped up in some sector and will collapse, and so go short at the inflated prices... thus lowering prices. Companies always face a reckoning point, on their individual timelines. It's just arbitrage 101. Nothing stays mispriced forever. And the sooner the "other side" figures it out, the quicker prices correct -- so you've got to be fast. Which is exactly what sophisticated investors are. |
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