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In the short run the market is a voting machine but in the long run it is a weighing machine

Ben Graham
In the short run, the market is a voting machine but in the long run it is a weighing machine

  • Short term markets are at the whim of the crowds
    • Investors chase what is popular (prices rise) or sell what is unfavorable (prices fall)
  • Long term markets tend to land at an objective fair value
    • markets weigh the cashflows generated by the business

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