Earnings is Key Determinant of Market Returns in The Long Run
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10th Apr, 2018
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In the short term market is like a voting machine, but in the long run it is like a weighing machine – Benjamin Graham Equity market returns are made up primarily of two components, corporate earnings or earnings per share (EPS) growth, and P/E (price to equity multiple) expansion.
Sometimes, when the market is in the momentum phase and is driven by liquidity, a large part of the returns gets delivered by PE expansion, rather than by earnings growth. However, over the ..
Source:-The Economic Times – Market Moguls
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