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The biggest voting machine

Jun 26, 2024

One of Benjamin Graham’s most renowned quotes captures the essence of value investing: “In the short run, markets are a voting machine, in the long term a weighing machine.” This concept was vividly illustrated recently with the dramatic fluctuations in NVIDIA’s stock price. In just three trading days, NVIDIA shed $600 billion in market capitalization, only to regain $250 billion from its pre-market low yesterday —remarkably, all of this occurred without fundamental news driving the changes. This staggering $850 billion swing over four days is equivalent to ten times the annual GDP of Luxembourg, showcasing the market’s volatile ‘voting’ process on NVIDIA’s intrinsic value, which remains undetermined.

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