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[QUOTE="HuskyHawk, post: 4733380, member: 1414"]
One would think the short squeeze on GameStop would illustrate this point.  Intrinsic valuation metrics would have produced a radically different result than what we saw.  The markets are no longer rational and have gotten less rational over time since online trading opened them to the masses (which was a good thing).  Joe investor isn't calculating the present value of future earnings and dividends then adjusting for risk.  He is saying, "Coke seems like a solid company with decent dividends" or "I bet this company will do well as we make more EV batteries".   Or for GameStop, that enough small investors working collectively can artificially inflate any asset as long as they don't fear the losses.  No model can predict that.

I used options as simple leverage back in the late 90s and 00s, because I lacked the funds to buy shares.  I once knew how to build complicated spreads that guaranteed a return, but those required massive capital for relatively small ROI.  Big players with supercomputers own that space.  They still work as leverage, and for short positions, but I no longer need to accept the additional risk that comes with that. If others do, go for it.
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