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Share price is an estimation of future performance, not past or current performance. Specifically it's supposedly the net present value of all future cash flows
by barrkel 9y ago
Share price is an estimation of future performance, not past or current performance. Specifically it's supposedly the net present value of all future cash flows, discounted appropriately.
- ZenoArrow 9y agoHow do you respond to the comments of stock market investors that suggest the market is frequently irrational?
- lmm 9y agoThe market is inherently volume-weighted, and there is much more "smart money" than "dumb money".
- ZenoArrow 9y agoTo give an example of something a smart investor would do, Warren Buffett supposedly only invests in industries he understands in depth: http://www.investopedia.com/articles/05/012705.asp http://www.investopedia.com/articles/05/012705.asp What proportion of investors would you suggest show such restraint? Over half?
- lmm 9y agoThe proportion of "investors"? Low. The proportion of market capital allocation, among people doing active allocation for long-term buy and hold strategies? Very high.