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The idea that share price is based on the next 20 years is truly laughable. The company themselves don't plan anything concrete more than 12 months out and anyt

The idea that share price is based on the next 20 years is truly laughable. The company themselves don't plan anything concrete more than 12 months out and anything further than that is guesswork. To think that you can project revenue even 3 years out is simply fictional (Source: my wife is in finance exec at a public tech company and one of her fields of expertise is FP&A). That said, analysts will make guesses based on financial projections and then give multiples to things like revenue or earnings, depending on the company. If a quarter of Google's revenues is impacted, it will have immediate effects. Of course, that's assuming that it's only a single quarter's revenue which in this case would be wrong. You're talking months of high unemployment globally.

crazygringo 7y ago
> anything further than that is guesswork Well of course! Nobody knows what the future will be -- it's all best-educated guesses. That doesn't contradict my point. The stock price winds up being a kind of market-driven wisdom-of-crowds situation of a ton of different people's guesswork, mostly institutions with teams of researchers. Obviously Google's price has been impacted. But the point is the price hasn't been impacted nearly to the same degree as immediate revenue. Because? People expect Google to be around and doing fine for a couple of decades. So you're right that these things can't be perfectly predicted... but the stock price still is the result of everyone's predictions, as imperfect as they are. It's not "laughable" -- it's literally how it works, and if you don't believe that, I don't know what to tell you.