3rd Dec 2009 by Gary
There are two basic things that drive stock prices. One is related to short-term gains, while the other is related to long-term gains. For short-term price movements of stocks, much of that is driven by news reports throughout the day which drives speculation and short-term price movements, which can be either up or down. Most of this is worthless to those wanting to build their wealth. For the long term, stock prices are largely driven by the competitive position of the company in the sector they compete. There are exceptions of course, like large holding companies such as Berkshire Hathaway, or companies competing in numerous sectors like General Electric. But even they can be measured by the businesses they have and how they rank against their competitors.
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