K,
Spoken like a true engineer!!!
I'll take that as a compliment. <g>
I don't think you appreciate how undervalued your investment is right now. When it is more fairly valued that is exactly the time for them to take their foot off the mkting accelerator so that it doesn't become OVERVALUED, for now they don't need to worry about that at all.
Actually I do appreciate how undervalued LSI is, but I don't care too much. My investment time frame for LSI is 3-5 years, and I only bought in this winter, so there is plenty of time for things to change (for the better, of course <g>). However, your point is well made, and I recognize that not everyone is investing on my time frame.
You also might want to through you efficient market hypothesis in the trash can (along with mine). The market is driven by supply and demand and earnings are only one element that influences the demand component of the equation.
You are certainly right about there being many other influences to the stock price. However, I still believe that earnings is the major influence over time. LSI's stock price might go to $15 or to $35 based on human emotions, economic conditions, El Nino, etc., but it is not going to be $2 or $200 unless earnings have changed dramatically. As a long-term investor I can afford to ride out the swings based on emotion. Of course human emotion, supply and demand, will still affect the price on the day I buy and the day I sell, but in the period of years in between, the major component of the change in price will be due to the change in earnings.
Actually I guess the stock price is really a reflection of future expected earnings, which can be influenced by a large number of factors, but I think you would agree that one of the biggest of these is past earnings performance. You don't see people out there predicting that LSI will lose money next year or make $6.00 a share. Why? Because they haven't done it in the past. I'm not disagreeing with you about the effect of emotion on the market, just pointing out that over time emotion tends to move back and forth rather than moving the price strongly in a specific direction. Sometimes a company will get a bad reputation with the Street, but I think you will find that it usually has at least some relation to poor earnings performance.
Good luck, the world needs good engineers as they create the REAL value in this society. However, marketing people are much more highly paid because they can create PERCEIVED value which is just like having a money making machine because it allows you to get something for free!
I can't argue with you there. The big bucks do go to the people in the public eye, and I have no beef with that. I enjoy doing what I do, and that is good enough for me.
Regards,
G.P. |
