Well let's just take a business that is morally horrific, yet financially sound in a fundamental sense. Assuming the business is against the morals of everyone, no one would want to buy the shares. So no matter how 'great' it is doing financially, the SP will not go anywhere.
But that's going off on a slight tangent. My initial pondering really was meant to say, what if everyone was wrong about a company, thinking it was great when it wasn't? The SP of that company would still go up, and if everyone is wrong about a fundamentally sound company, that company's SP would not go anywhere.
Most long term investors hold stock for many years this doesn't make much difference
they don't buy today and sell next week so why would they care if the share price
go up one day down the next, up again next month, go down and stay down for another year?
What they care is over all long term return.
over 10-15 years will it provide me adequate return
Capital appreciation + dividend
Fundamentally strong companies that deliver increase earning WILL ALWAYS
get recognise, and price correctly by the market at some stage....and the time they dont price correctly we buy up in large quantities
Every so often a new fashion will hit the market (Tulip Mania, 80's corporate raiders, dot com, mining exploration boom etc...)
and these fundamental strong companies may get pushed a side for a little while but they will be around once the fashion gone out of style.
You can chose to chase the fashion and get out before fashion goes out of style
or the slow and steady path without timing, without fashion and steady as she goes return...
Have a look at these fundamentally strong companies, despite crash, boom and bust do they provide long term investor (10 years) with adequate return??? I say more than adequate, I say STELLA return...
CBA, CCP, CCV,FLT, REH, TRS, WOW, ONT, DMP, QBE, NVT, TGA
I have interest in many of those listed stocks....
Long term investing in fundamentally strong companies works and it works to perfection....