Timmy elsewhereJune 26, 2010 Tim WorstallTimmy Elsewhere3 CommentsAt El Reg again. Why do people keep saying that markets are short term in their outlook? previousOn those vile cuts to the education budgetnextThe things you find out during a World Cup 3 thoughts on “Timmy elsewhere” Nick June 26, 2010 at 1:06 pm A measured and temperate piece, for once. Indeed Apple v Microsoft does illustrate your point: “there’s not in fact any grand overarching point to be made here.” Yes – I like it! Gene Berman June 27, 2010 at 2:35 am Markets are neither short-term nor long-term in their outlook: they are neutral with regard to time, being the discounted-to-now opinions of everyone willing to put his money where his opinion happens to be. Anyone who thinks that the market’s current opinion on anything is too “short-term” is more than welcome to put his money where he thinks right and to profit from his more-correct view of reality if he’s right. The people finding that fault with markets are people who either have backed the wrong horse(s) and lost some dough or they’re simply people with a parasitic interest in foisting ever more political management on business (called regulation). Markets aren’t perfect but they are a nearly perfect composite of the opinions–both as to the short and the long term–of everyone interested enough to back his opinion with cash. Wherever the market is “off”–there’s a fortune to be made! The Remittance Man June 28, 2010 at 3:30 pm Gene, I agree with you, but I’m not sure if neutral is the right expression. I rather prefer to think that markets factor in time as appropriate to the particular question. For example: I can buy a gold mine with a proven life of five years at current prices and costs. This makes it marginal compared to other projects. But a change in gold price or costs would add another ten years to the mine’s life and make it a much better prospect according to my personal buying criteria. What is my view then? Discounting back to present value is then just a mechanism to allow me to quantify the costs compared with other projects with different cashflows over different time frames. Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment Name * Email * Website Save my name, email, and website in this browser for the next time I comment.