I've already said this already regarding the efficient market hypothesis whereby the market "says things" through the stock price, and where all information available to date are reflected in the stock price.
I REJECT IT. And I reject because it does not hold everywhere.
From Wikipedia:
The efficient-market hypothesis was developed by Professor Eugene Fama at the University of Chicago Booth School of Business as an academic concept of study through his published Ph.D. thesis in the early 1960s at the same school. It was widely accepted up until the 1990s, when behavioral finance economists, who had been a fringe element, became mainstream.[7]
Empirical analyses have consistently found problems with the efficient-market hypothesis
Alternative theories have proposed that cognitive biases cause these inefficiencies
Investors and researchers have disputed the efficient-market hypothesis both empirically and theoretically. Behavioral economists attribute the imperfections in financial markets to a combination of cognitive biases such as overconfidence, overreaction, representative bias, information bias, and various other predictable human errors in reasoning and information processing. These have been researched by psychologists such as Daniel Kahneman, Amos Tversky, Richard Thaler, and Paul Slovic.
Now you said about ERHE:
still the stock can't move away from the offering price of .075. The message of the market is telling me the LOI is not a done deal, the amount of cash if it gets done will be minimal, and a private placement bringing big time dilution will be required to keep the lights on. Not really that bad imo, simply the reality of the situation. - ssc
I DO NOT BELIEVE any of the above can be determined by the stock price.
The bid ask spread sometimes is so wide that the stock can move 20% either way. That's because the stock is not liquid...
Erhe does not have too many analysts following the stock with enough information to provide for any investor to make a rational valuation of what the stock is worth.
In fact, with no assets on the balance sheet or income on the income statement...NO ONE CAN VALUE IT.
We have no idea how much oil they will discover...and without that number you cannot try to estimate future revenue or income. Again NO ONE CAN VALUE IT.
The efficient market hypothesis that the market tells us things in the stock market DOES NOT APPLY.
A person could decide to sell some of their stock and buy a BMW instead...and the stock would plunge and everyone would interpret that the stock price is saying something, when all it is saying is someone preferred a BMW to holding the investment any longer.
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