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But an assumption about long term gain can still deliver short term returns. Would shareholders behave the same if long term returns were the only returns avai
by 7952 2y ago
But an assumption about long term gain can still deliver short term returns. Would shareholders behave the same if long term returns were the only returns available?
- DennisP 2y agoBased on your first sentence, it seems that by "returns" you mean increases in stock price. Given that, I don't think there's a clear dividing line, since investors are always forward-looking. I could see only long-term earnings being available but that's something quite different. Shareholders are often willing to put up with that situation, as long as they believe the long-term story (and see that other investors believe it). A situation that could make short-term share price increases unlikely is if the stock is just way overvalued for its likely earnings in any reasonable timeframe, in which case shareholders will happily take profits rather than try to make the company change anything.