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In a very subjective way. Warren Buffett and his mentor Ben Graham would say that the Stock Market is a voting machine in the short term and a weighting machine in the long term.

Participants have different mental models under which they value the individual stocks. Value investors look at intrinsic value and discounted cash flow. Most people would value the stocks based on discounted cash flow. But other people would look at momentum of the stock, specific events, war, elections, etc. to factor in valuing the stock. That is what makes the stock market interesting: the heterogeneity of valuation models for individual stocks.

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