On Tue, Sep 2, 2008 at 11:53 PM, Laurent GUERBY <[EMAIL PROTECTED]> wrote: > On Tue, 2008-09-02 at 11:07 -0700, Perelman, Michael wrote: >> Theoretically, shareholders might be interested in profits, but given >> the rapid turnover of stocks, you might be forgiven for thinking that >> shareholders are interested in stock prices. > > Theoretically current stock prices are to reflect estimates of future > profits so there should be a strong connection between the two.
This seems like an empirical question: is there any research that shows such a correlation? From my casual observation there seems to be more of a correlation between sock prices and *past* profits. e.g. when GOOG beat earnings expectations for a couple of quarters their stock price immediately surged - most spectacularly in Oct 2005 and again in Oct 2006 and Oct 2007. http://finance.google.com/finance?q=NASDAQ%3AGOOG -raghu. -- "CURIOSITY? Nah. I got THAT cat with a lawnmower." _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
