Fundamentals count for long term investing based on historical analytics.
Short term investing doesn't have anything to do with fundamentals, imho and is driven by rather non-deterministic factors. HVT can take advantage of these factors - humans can't. Again, imho.
What's your control and basis for considering what is and isn't overvalued?
For every economist who tells you the market is overvalued by 30-50% I can find you one that will disagree. I would find it more difficult to find one with no particular agenda.
As for your question ? My answer is that Facebook is definitely overvalued relative to Apple.
What I cannot tell you is whether the actual replacement value of Apple is actually close to $600 billion. They seem to be able to replace Chinese employees for a couple of bucks to the family and a few grand to the inspectors (allegedly, and not verified).
No, fundamentals play a part in all investing, long term and short term.
True with short term (daytrading) you have to be aware daily of many other things that may influence a stock price at anytime, news events, earnings reports, warnings, upgrades/downgrades, insiders buying/selling, new product releases, so on and so on.
But without knowing the fundamentals at any time you wouldn't really know if you should go long or go short.
Anyone who invests in any company or against any company without knowing a companies fundamentals is an idiot.
As far as a valuation goes, a companies stock and its valuation is a moving target.
A lot of times its difficult to put an absolute valuation on a company especially a big company because it is constantly changing.
This is why they use the term Estimates.
This is also why you can have a 100 analyst cover a company like Apple and all of them have a different valuation.
But its not really all that difficult to have some kind of idea if a company stock price is overvalued or undervalued.
imho...Apple at $600 is still undervalued.
That is still less then 15 times earnings.
You should always pay attention to the multiple.
When you ask what is my basis for considering what is and isn't overvalued?
When studying the fundamentals I base it on factors like.
EPS
Multiple - Teens or less is great, 100x like FB at IPO..Run!
Debt - major factor
Revenue
Cash on hand
Cash flow
A stock will always have its up's and downs.
Chart lovers try to predict this with algorithms and past charts. Sometimes they get lucky, a lot of times they look ridicules.
Chart lovers cant predict when a Hedge Fund moves in and takes control or an analyst decides to change their grade on the stock or any other thing that may impact the stock price.
Even if you daytrade always do your DD, read SEC fillings, listen to conference calls, if you have questions try and call in on the conference call, I have done that and ask a CEO questions.
Basically in the end you want to have an idea if a company is doing good or doing bad.
If good then go long, if bad then short the pig.
This is why Facebook is getting the ever loving shit kicked out of them, keep in mind there is no charts on them yet, it's that their fundamentals Suck.
Always remember, Pigs Get Fat, Hogs Get Slaughtered
