Does the stock price truly reflect corporate value? : The boundary between fundamentals and speculation

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Introduction

In the stock market, stock prices are considered to reflect the value of a company.
However, when considering the impact of short-term market movements and speculative trading on stock prices, this premise does not always hold true.
This article delves into the relationship between stock prices and corporate value, and the boundary between fundamental analysis and speculation.

Basic relationship between stock price and corporate value

Corporate value is the present value of future cash flows, and theoretically stock prices should reflect this corporate value.
However, in actual markets, investors' expectations and emotions, as well as changes in the external environment, can influence stock prices and cause deviations from corporate value.

Short-term market movements and the impact of speculation