Worldwide stock markets have plummeted over the past month and are characterized by extraordinary fear and uncertainty. This decline is exacerbated by motivated and forced-selling due to margin calls and hedge fund liquidations. In consequence, fundamental analysis is not working as frenzied emotion has taken over the global marketplace. Nonetheless, it should be remembered that in the course of investment cycles, markets frequently overshoot on the upside as well as the downside. Today, given the current financial environment, stock prices bear little relevance to their intrinsic values. However, this will change, in due course, as the overhanging investment pandemonium eventually dissipates.
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