If you went to college and originally got your stock market education from your professor, they'll try to convince you that "markets are efficient", meaning that the stock market has the company fairly priced at pretty much any given moment. Of course those professors are usually broke and horrible investors. Nonetheless, Netflix's stock (NFLX) is a good example of how insane market pricing can be for a company. Now, Netflix's subscriptions, etc. hasn't changed that much in a handful of months. Yet, within six months, the stock price pretty much cuts in half. Then after that, rallies up almost 50%...and now is heading back down. There's nothing "efficient" about that. Obviously share prices are way off from any sort of fair value from the company.

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