MXO & ERG

I don't think I'll ever understand the share market.

Why is it that stocks in companies that are basket cases financially can have such strong runs while those in solid companies that are actually performing and making money go down.

Two cases in point : ERG is now well above the price it was when the disastrous financials were announced. Sure they received a bit of a lifeline from the Vic Govt recently but I've heard nothing that says they are out of the woods yet.

MXO has had a good run today on no news. If you read what has been announced over the last few months they have to be in a desperate cash position but the punters bid the stock up.

Is it just daytraders that sense (or create) a run, cyclical price changes or something else?