Expected long-term cash flows, discounted by the cost of capital—not reported earnings—determine long-term stock prices.
In the short-term, Mr Market is bipolar and very susceptible to stories and what is fashionable.
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18-19% ROE wale being bought by institutions at anywhere b/w 12 and 20x price to sales. Not many liked this space in 2013. Not many hate it today. Social validation in investing is a big curse ...
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