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I think you do not understand how stocks work. A stock in a stable, cash-generating company would never "fall to the floor" when it stops growing. Its stock wou
by holograham 13y ago
I think you do not understand how stocks work. A stock in a stable, cash-generating company would never "fall to the floor" when it stops growing. Its stock would simply fall to its present day value. That inflated stock price you saw fall was based on future earnings. We then classify that stock as a "value stock" which means it has limited growth but maintains a stable price and perhaps yields a nice cash dividend that is paid from the operating profits. The company should still seek to enhance efficiency and productivity as well as keep its products/services fresh and relevant but growth would be modest at best. These companies are plentiful in the stock market and very important to any stock investors portfolio.
Granted your world view of stocks is probably limited to top tier tech stocks which have huge growth potentials (apple, amazon, google) and have huge price swings based on the latest tech conference or article.