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> That's one of the beautiful things about share-based compensation (from a shareholder angle). The problem with shares is that they have become (or maybe have

> That's one of the beautiful things about share-based compensation (from a shareholder angle). The problem with shares is that they have become (or maybe have always been) a purely speculative asset. They rarely reflect the reality, and are always expected to just rise rise rise in price. Even if literally nothing changes, the company remains stable and profitable, the shares will take a dive because continuous unlimited growth is always expected.

djbebs 4y ago
Except that's not true. At the end of the day all stock market returns come from one's of 3 things: Dividends Earnings per Share growth Multiple expansion Over the long run the speculation that you so decry ( which amounts to Multiple expansion) has a negligible impact (less than 1%). Sure you have plenty of short term booms and busts, but over the long term they are really irrelevant.
- dmitriid 4y ago
  > At the end of the day all stock market returns come from one's of 3 things None of which really reflect reality, and rely on basically pure speculation. They also depend on the stock to go up up up up. > Over the long run the speculation that you so decry ( which amounts to Multiple expansion) has a negligible impact (less than 1%). Over the long run stocks are just speculation.
  - sokoloff 4y ago
    I disagree that the others are 100% pure speculation, but let's just look at the case of dividends. Dividends (especially for companies with a long track record of paying and increasing them) are reality as far as I can tell.
  - matwood 4y ago
    Dividends and EPS are real and don't rely on stock movement at all. It's the exact opposite where they drive stock movement.
  - therealdrag0 4y ago
    Huh? How do dividends depend on “stock to go up up up”? That’s opposite of my experience. How does EPS have anything to do with stock price? I think you have it all backwards. Stock PICKing is speculative because we can’t predict the future. But that doesn’t mean that the future is unhinged from underlying fundamentals.

djbebs 4y ago

Except that's not true. At the end of the day all stock market returns come from one's of 3 things: Dividends Earnings per Share growth Multiple expansion Over the long run the speculation that you so decry ( which amounts to Multiple expansion) has a negligible impact (less than 1%). Sure you have plenty of short term booms and busts, but over the long term they are really irrelevant.

dmitriid 4y ago
> At the end of the day all stock market returns come from one's of 3 things None of which really reflect reality, and rely on basically pure speculation. They also depend on the stock to go up up up up. > Over the long run the speculation that you so decry ( which amounts to Multiple expansion) has a negligible impact (less than 1%). Over the long run stocks are just speculation.
- sokoloff 4y ago
  I disagree that the others are 100% pure speculation, but let's just look at the case of dividends. Dividends (especially for companies with a long track record of paying and increasing them) are reality as far as I can tell.
- matwood 4y ago
  Dividends and EPS are real and don't rely on stock movement at all. It's the exact opposite where they drive stock movement.
- therealdrag0 4y ago
  Huh? How do dividends depend on “stock to go up up up”? That’s opposite of my experience. How does EPS have anything to do with stock price? I think you have it all backwards. Stock PICKing is speculative because we can’t predict the future. But that doesn’t mean that the future is unhinged from underlying fundamentals.