From: Rafal Smigrodzki (rafal@smigrodzki.org)
Date: Sat Jun 14 2003 - 23:09:08 MDT
From: "Dossy" <dossy@panoptic.com>
> If company's stock prices were directly related to the quality of its
> products, services, technology, or even employees ... then how do we
> explain the dot-com bubble that just came and went? There were plenty
> of companies pushing vaporware with fresh-out-of-college management who
> had stock prices in the 3 digits.
### Simple - long term stock price is largely determined by the earning
power of a company, and this usually stems from the factors you mention. In
the short term, "irrational exuberance" can achieve a lot, before inevitably
crashing.
If you choose to concentrate on the sufficiently short term, you can miss
the arbitrarily obvious.
Rafal
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