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Pastimes : How to best deal with KOOKS at this web site

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To: Herb Fuller who wrote (201)4/20/1997 3:26:00 PM
From: Gottfried   of 1894
 
Herb, from my post # 199:>> I have one item that has occupied my thoughts lately: what are the premises and covenants that stock market investing is based on? I think the most important one is 'If earnings per share grow, then shares rise in value'. We have all seen this assumption violated in the short term. Is it valid in the long term? I would like us to make a list of tacit assumptions that underlie our participation in the market.<<

To put my question another way, do you agree that investors (those
interested in a stock for the long term - weeks, months, years) base their valuation of the stock primarily on earnings growth? Then we have to contend with traders (buying and selling mostly on the same
day, little interest in fundamentals, making buy/sell decisions based on momentum). They are the ones that can move stock price counter to what investors expect. Example: INTC dropping after announcing stellar earnings.

Gottfried
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