“In the short run, the stock market is a voting machine, but in the long run, it’s a weighing machine.”
~ Warren Buffett
Guru Of Value Investing
* What the above trying to say is that, in the near term, the stock market or the individual stock is pretty much subjected to the opinions of the investors / market players who would ‘vote’ the stocks with their money, but in the longer term, the value of the stock (representing the company) will prevail depending on the performance of the business.
Two important points here – One, in the short term, the stock price is dependent on market sentiment. Two, every stock is a representation of the underlying company, to decide whether a stock is ‘worth it’, take a good look and understand the fundamental of the underlying company.