article thumbnail

What Your Stock Price Is Really Means

Harvard Business Review

Alfred Rappaport's article, " Stock Market Signals to Managers ," in the November-December 1987 issue of the Harvard Business Review, provides managers with a clear method for understanding how price reflects the market's expectations about the company's future financial performance. But very few executives or investors do.

Price 8
article thumbnail

We Can’t Study Short-Termism Without the Right Metrics

Harvard Business Review

What if concentrated market power of a few companies in an industry has made these companies more profitable than usual? For instance, Home Depot, despite a painful housing market–led recession, retained most of its hourly workers and their benefits in 2008–2009. Overly optimistic financial statements.

EPS 8