Price has got beggar all to do with value in non-monetary terms.
Gold makes a good door-stop, but you can't do much with it compared with say oil.
Traders are usng Tesla a lot, because, as long as its volatile it's tradeable. Up or down makes no difference.
As I explained, in simple terms, a trader see which way the wind is blowing and uses the "price action", part of which is the way the price behaves at previously established Levels.
Prices are inherently UNstable:
If the price is rising, there are lots of buyers, which pushes the price up, and up. Sooner or later that stops, and the price will be at one of those prior-established Levels. Then the money is to be made when the price falls. It's positive feedback, the same "feedback" you hear when a loudspeaker is picked up by a microphone- lots of noise.
It's an unstable system with small stable points which traders exploit.
It has only a little to do with the value of the company. If you use the standard share-value metrics such as Price to Earnings ratio, there's a bonkers range if you look across the biggest companies, from 10 to 1000 and wider.
People like to speculate, which pushes th price up, and you can hitch a ride. It's a mechanistic process which many people have worked out, so you can sit on their shoulders.
[ Profit is made from a falling price through the mechanism of "going short".
Say you think the price will fall:
You borrow the stock at the current price, say 100 per share.
When the price drops to 90, you buy a share at 90 and give it to the person you borrowed a share from.
You made 10/share.
It all happens in the click of a mouse, or automatically on a price-level-trigger.]
You're kidding. Buying an index is a risky play. They often go down, though it's true that given some random long time they have gone up in numerical terms. In real-money terms, you have to work out where on that positive-feedback switchback you are. See
HERE .
Over shorter periods, you can lose a lot.
I have indicated before what to do if beating inflation is your main aim.
Worth looking at this if you like "investing"/abandoning your money in, a simple market index:
View attachment 377572
A sure way to make money is be an IFA/stockbroker, so as was explained in Trading Places, you take a cut from others' hubris or ability whether they win or lose.