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Investors are not a single unified hive mind. Some people don't care about long term profitability - they are just in a relatively short-term position and want
by sophacles 4y ago
Investors are not a single unified hive mind. Some people don't care about long term profitability - they are just in a relatively short-term position and want profits now in the form of dividends and increased price. Some people want the valuation and/or price to go down because they hold short positions. Some people want the company to forego dividends in favor of investment into long-term expansion while other people are hoping for those dividends as part of their retirement income. This is true for institutions too - they have all sorts of reasons to prefer short term gain as much as they want long term gain.
- WalterBright 4y agoHaha, the stock will tank on bad future prospects faster than you can sell. Being a short-termer in a stock only works if the other stockholders are in it for longer than you are, and believe in the long-term prospects. Dividends are not a sign of short term investing. When the company's profits decline from short term thinking, the dividends disappear. BTW, if you identify a company that is short-terming, and the other investors haven't caught on and tanked the stock, you can make a mint by shorting the stock. Got any success stories at that? Have you made money shorting McDonald's?