The Inelastic Market Hypothesis

Are stocks prices really driven by fundamuntals?

Company fundamentals are supposedly the only driver of stock prices over the long run, or at least that has been the widely accepted view among professional investors, academia and economists since markets and corporate finance began. However, in the face of price dynamics phenomenon that could not be explained by fundamentals alone, several theories were developed, most of them aimed at explaining temporary movement of prices that could diverge from fundamental, whilst keeping the central idea that prices should revert to fundamentals in the long run.

What if prices (including on the long run) are not driven by fundamentals but by order flows? I.e. by supply and demand of stocks? This is the theory we discuss and explain below