The Market Doesn’t Care How “Fantastic” Your Stocks Are

In the short run, stock prices reflect very little. There is no correlation between the price and the value of the company.

Over the long run, we should see things even out. Good companies are reflected in the price. Microsoft and GoPro are two prime examples of what can happen in the short run compared to longer terms.

Microsoft was a great buy in the early 1990s. There was a dip in price which mean that it took 18 months for the stock to get back to where it was break even. Over the last couple decades, this stock went up many fold.

GoPro is the exact opposite.

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