Question

it has been argued that a investers might buy an overvalued asset because he thinks he can sell it to another who will pay even more . This is called​

Answer 1

Answer:

A company is considered overvalued if it trades at a rate that is 50 times its earnings. Overvalued stocks are sought by investors looking to short a position, selling shares to repurchase them when the price falls back in line with the market.

Answer 2

This is called a greater fool.

• According to the theory, prices rise because people can sell overpriced securities to a "bigger fool".
• This regardless of whether they are inflated and is until there are no more fools to be found.
• According to this specific idea, investing entails disregarding values, earnings reports, and all other data.
• Ignoring the fundamentals is dangerous, and those who believe in the larger fool notion may be left at a loss if the market corrects.