Why stock prices move (Part 2 – The Long Term)

At a glance An investor needs to remember that a stock price represents ownership in an underlying business Therefore, a “fair value” for a stock depends on the market’s projection of future business performance Wearing an optimistic or a pessimistic lens can provide large ranges for this “fair value” The opportunity for the calm investor is in not getting caught up in the overly optimistic or the pessimistic views and comparing a prevailing stock price with what would be a realistic price based on historical business performance “In the short run, the market is a voting machine but in the

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