How Market Sentiment Affects Valuation
When investors talk about a stock being over or undervalued, they may be looking at fundementals like earnings, cash flow, or growth. With that being said, stocks don't just move based on the numbers, but how people feel about those numbers. Market sentiment is the collective mood of investors, and a driving force of finance. It has the potential to move valuations far higher than what the fundamentals may say, or pull a company down simple becuase of fear. Understanding mar