Now this is just silly. Stock prices are a bet. Sometimes they are more of a sure bet, sometimes they are more of a risk. But the idea that anyone can know exactly what a stock should be priced at for a company in a very dynamic field like facebook is just silly. It's better to point out that facebook's current valuation seems quite high and the risk of investing in facebook right now also seems quite high. But beyond that there are no certainties. Facebook could end up with a trillion dollars a year in net revenue in 10 years, or it could go end up sold to a 3rd party company for a tiny fraction of it's current market cap. We don't know and nobody can know.
You really think companies investing billions in things like Facebook are just throwing money at whatever they fancy and hoping it all works out? Investment banks employ thousands of people who do nothing but sit in their office and calculate if a certain security's price is off by fractions of a percent. Virtually everything that bank does is based on that analysis. They are very well-paid and a good market researcher is worth 100x his weight in gold-pressed latinum. They do fuck up, often publicly as it turns out, but that does not make their science any less refined.
Nonsense. It has nothing what so ever to do with science. All the analysis depends on rules that all the other players also know. If someone went in and changed some fundamental entry in their rule book (e.g. "testing from the bottom") the rules that the stocks themselves seem to follow would change overnight.
