• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint
Share this Page URL
Help

Chapter 3. The Basics of Fundamental Analysis > Sentiment and Expectations

Sentiment and Expectations

Is it true to suggest that the markets are driven by emotions? Well, certainly greed and fear do make a significant contribution to prices in any market context. How can it be that a company with little history and no earnings whatsoever can be valued in the billions of dollars? Does that company have proprietory technology that will change the world as we know it? Does the company have such a convincing marketing and growth strategy that investors are purely valuing the company based on expected gross revenues?

Whatever the case, market sentiment doesn’t necessarily work in a logical way, and sometimes it’s difficult to understand how a company like Coca-Cola or McDonald’s can get panned when delivering consistently good results when others who don’t earn a dime are being hailed as the new saviors of the markets! It is this sentiment that drives expectations of the company’s future performance. And as we know from our everyday lives, sentiment can turn on a dime!


PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint