/biz/ - Business & Finance

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Anonymous Tue May 19 20:16:25 2020 No.19213163 [Reply] [Original]

Bad news keeps pumping the stock market. Airlines lay off half their crew, stonk goes up. Corporations miss earnings targets, stonks go up. The analyst rationale is that as soon as bad news is announced, that means the future upside is just that much greater, which is immediately priced into the current valuation.

Shouldn't this work in reverse as well? Whenever there is good news, that just means the potential for future red dildos is that much larger. Surely using the logic above, that means stocks should plunge every time they exceed expectations.

We don't see that happening, which means the rationale for why stonks go up when bad things happen is bullshit as well. So why does it happen?

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