[Excess Corporate Cash / Cheap Debt] │ ▼ [Company Buys Back Own Stock] │ ▼ [Total Outstanding Shares Decrease] │ ▼ [Earnings Per Share (EPS) Rises Automatically] │ ▼ [Stock Price Increases Proportionally] The Invisible Math
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Warren Buffett said, "The market is a voting machine in the short term and a weighing machine in the long term." The undeclared secret is that "the short term" can last for a decade. [Excess Corporate Cash / Cheap Debt] │ ▼
The stock market is a complex and mysterious entity that can be influenced by a multitude of factors. While many investors and analysts focus on traditional metrics such as earnings reports, economic indicators, and industry trends, there are several undeclared secrets that can drive the market up. These hidden forces can be difficult to identify and understand, but they can have a significant impact on stock prices. The stock market is a complex and mysterious
Therefore, a rising market creates a technical vacuum. The higher stocks go, the more forced buying occurs from derivatives desks. Conversely, when the market crashes, dealers must sell futures to hedge their put options, accelerating the decline.
