So much for the "Efficient Market Theory" they taught us in economics, huh?
I used to invest on fundamental reasons alone, using technical analysis to just time my "buy and hold" positions. Then fundamental analysis went out the window with the proliferation of using the internet to tap into equity markets. The internet has created more "traders" than "investors", largely because investing is no longer a "good old boys club" anymore. You can trade anywhere now - in the bathroom on yur cell phone, from your PDA at your grandmothers house, etc. We created this "access anywhere" market, and what we are seeing now is some of the fallout from this vision.
However, you are right that the herd will eventually come with the fundamentals in place, and they will undoubtedly move prices much beyond thier fair value too.
Got to take the pros with the cons in this new world we live in...
