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Exactly. Healthy profits are the (inevitable?) result of a well run business, which requires attention being paid to a variety of factors, not just the bottom l
by alexqgb 15y ago
Exactly. Healthy profits are the (inevitable?) result of a well run business, which requires attention being paid to a variety of factors, not just the bottom line.
Failing to understand this, and focusing exclusively - or even disproportionally - on the bottom line, is likely to improve it in the short run, diminish it in the medium run, and destroy it in the long run.
- WalterBright 15y agoTake a look at the P/E values for various companies. Ones with a high P/E are clearly those where the shareholders believe there is long term growth in the profits, and are willing to forego current profits to get it. I really do not buy into the popular idea that shareholders are only interested in short term results. If that were true, then marginally smarter investors would regularly make themselves huge fortunes by buying undervalued stocks.