Now you’re thinking. Fundamental value doesn’t change because there is no such thing as fundamental value. Let me repeat that again: there is no such thing as fundamental value. This is perhaps the most important myth of finance (and economics). There is only relative value. Those of you that are on this site doing investment banking interview prep know that the way you value a company is by comparing its value to other similar companies (even our so called “intrinsic value” DCF analysis uses comparisons to come up with forecasts, terminal values and WACC). So, if Amazon in 1999 trades at a 100x P/E ratio than why shouldn’t Ebay or Pets.com? Similarly, if my neighbor’s ocean front Miami beach condo sells for $1 million shouldn’t my identical one also be valued at $1 million? That there is no such thing as fundamental value is true for not only financial assets but applies to all assets.