InvestorQ : company is not involved in fluctuation of price in the stock market ( i.e price depend on buyer and seller mood) than why we see the fundamentals of that company.
rahul kothari made post

company is not involved in fluctuation of price in the stock market ( i.e price depend on buyer and seller mood) than why we see the fundamentals of that company.

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Dhwani Mehta answered.
1 year ago
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It is said that in the short run the market is like a slotting machine while in the long run it is like a weighing machine. In the short run, it is factors like technical charts, demand, supply and news that impacts the stock price. However, in the long run it is the fundamental strengths of the company like growth rate, the margins and the profitability that really determine the value. The fundamentals help to determine the fair value of the stock and in the long run the price eventually converges towards the fair value. That is why you look at fundamentals of the stock too.

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