The market is a voting and a weighing machine

Benjamin Graham, Warren Buffett’s mentor and the father of value investing famously said that in the short run, the market is a voting machine but in the long run, it is a weighing machine.   A war in the Middle East is still raging on as the one in Ukraine remains unresolved. With an oil price spike and sticky inflation keeping interest rates elevated, the world was concerned that we may be entering a period of stagflation. And yet, no one could have predicted that the global stock markets would have just hit another all-time high.  There is always a temptation to say the market doesn’t make sense and that this is irrational. However, once you understand what is actually driving prices, it makes a great deal of sense. It is earnings.  Over more than three decades of investing, I have watched...