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Why prices move over years

Investing Basics

Short term is a vote, long term is a scale

Day to day, price is a popularity contest: mood, headlines, rates. Over a decade, price tracks one thing — how much cash the business earns. Companies that grow earnings tend to see their share price follow. That lag between mood and maths is where patient money makes its living.

Check yourself

Over ten years, the biggest driver of a share price is…

  1. News headlines
  2. How much the business earns correct
  3. Interest in it on social media

Sentiment moves price this week. Earnings move it this decade. Confusing the two is the most expensive mistake beginners make.

Learn this properly

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