Is the sharp rise and fall of stock prices in the short term mainly due to emotional speculation? Does the stock value of unlisted companies depend on the company's operating conditions?

If it is a stock issued by a company before it is listed, it can't talk about the rise and fall of price at this time, only the change of value. This change is obviously related to the operation of the company. Well run companies may have such advantages: high market share, strong product competitiveness, stable high growth performance, good financial condition, good industry prospects, etc.

Such companies often have good investment value. Once the company issues additional shares or transfers shares, it is easy to be sought after by investors. Even if the company issues additional shares or transfers shares at a high price, someone will rush to buy them. Moreover, if the company plans to go public in the future, the issue price of shares can be set higher under the same issuance scale.

If it is a stock after listing, the rise and fall of the stock price will be more reflected as a market behavior. Due to the existence of speculation, the law of stock price fluctuations around the value is no longer accurate. Sometimes you will find that the stock price of companies with better business performance is relatively low. However, the performance is very poor, and even the garbage stocks that have lost money for consecutive years and are facing delisting have been speculated, which can rise several times in a short time. Therefore, we need to analyze the relationship between the two from the reasons for the rise of stock prices.

In the short term, the sharp rise and fall of stock prices are mainly emotional speculation. Many retail investors like to watch the news and listen to the news. The publication of a favorable policy may benefit an industry. From upstream to downstream, from manufacturers to raw material suppliers, many companies are involved. Can the stock price of companies with greater benefit rise higher? Not necessarily. For value investors, the expected benefits in the future can be quantified. According to a certain valuation model, the reasonable stock price range of the company in the next few years can be calculated. Once they think that the short-term stock price has been overestimated, they will choose to sell.

For short-term speculators, the fluctuation of stock prices has nothing to do with the current operating conditions of the company. They focus on those small cap stocks that are easy to touch hot spots. They are well-informed and often use gossip, market rumors, and news reports to quickly raise the share price to attract retail investors to follow suit. Make use of the capital advantage and low cost layout to quickly pull the stock price to a high level for shipment. They don't care about the real value of the company, just to earn the difference between the low price and the high price.

In the medium and long term, the stock price reflects the internal value of the company. However, the intrinsic value not only depends on the operating conditions, but also includes many other factors. For example, in the Ningde era, it is not long since the company was founded to go public, and now it has a market value of hundreds of billions. On the one hand, the development of the new energy battery industry has both national policy support and the general trend of its own development. On the other hand, the company's continuous R&D investment technology has taken the lead in the world, benefiting but not relying on a single major customer. Stable and high growth performance makes the company's shares have good investment value in the future.

In general, the stock value of unlisted companies depends on the company's operating conditions. In the listed stocks, the rise and fall of the price in the short term is entirely a market buying and selling behavior, while the medium and long term price trend is related to the company's ability to create value. The stocks that can continuously and stably create value for shareholders generally show an upward trend. Investors must recognize this relationship and treat it differently.

key word: Well managed advantage price of stock