“Often, there is no correlation between the success of a company’s operations and the success of its stock over a few months or even a few years. In the long term, there is a 100 percent correlation between the success of the company and the success of its stock. This disparity is the key to making money; it pays to be patient, and to own successful companies.” Peter Lynch...“People may bet on the hourly wiggles in the market, ...
I read an article in Mortley Fools sometime back (read here). In the article, it mentions that “Gains in a stock’s price may have a more sustainable backing if it’s powered mostly by growth in its underlying earnings instead of having the market bid the price higher.” Consequently, in the article, a comparison was made between the percentage difference in share price, trailing EPS and trailing P/E ratio.
