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Expectations Investing: Reading Stock Prices for Better Returns by Alfred Rappaport, Michael J. Mauboussin

Expectations Investing: Reading Stock Prices for Better Returns Alfred Rappaport, Michael J. Mauboussin ebook
Publisher: Harvard Business Review Press
Page: 256
Format: pdf
ISBN: 9781591391272

It is well-known that stock market rewards don't happen immediately, unless you partake in high-risk Choose stocks that can produce better than average returns which are about 10% annually. Do not give your money to an investment broker until you have thoroughly researched the company, using all the free resources you can find. Bear Case: Bull Case: Icahn could spur change at the company, as he has done with other investments in the past. But scratch beneath the surface, and there is an argument that Apple isn't so much a great bargain as it is a classic “value trap” — a company whose stock price is depressed for good reason. Without trying to resolve the theological question of whether this is a new bull market or a big rally in a secular bear market, we can be sure of one thing: Stock prices have already discounted a lot of good news. The company Furthermore, if sales continue to beat expectations, investors could come back to this stock. The clues are provided by the last market upheaval, the one in interest rates and bonds. Really surprised to find no mention of Tuesday's news that Apple has promised to return a further $55 bn to investors on top of the $ 45 billion already promised (FT April 23rd), billed as the "largest single share repurchase authorisation in history "! When you invest, make sure that you have realistic expectations. Between November and January, barring one week in If growth exceeds expectations, investors will fret about the Fed withdrawing its stimulus, bond yields will back up, and stocks will look less attractive. Start by But built into Wall Street's stock price targets was the expectation that the iPhone would rule the world. However, there may be hope for a turnaround – this holiday season, Best Buy finally logged U.S. By some measures, they are already stretched. Sales growth figures that weren't negative (though they were flat). But while the stock is cheap based on the profits of the past few years, value investors generally look to what they call normalized earnings, or true earnings power. As noted by Shiller (2005) many contributions to the literature have attributed stock-price overreactions relative to the rational expectations yardstick to bounded rational behaviour by investors. IPhone sales data come in better than expected.