Fundamentals Are Key, But Not Always In The Short Term

October 2025
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The reason to own a business, whether privately or through the stock market, is to generate sales, profit and, ultimately, excess cash that can be spent or reinvested. And, if one pays a reasonable price for such a company, they will eventually enjoy a favourable return on investment. In the short run, however, public equity performance can often become detached from these fundamental underpinnings, with prices driven instead by investor sentiment and psychology.

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