In the short run, the market is a voting machine but in the long run, it is a weighing machine.
— Benjamin Graham (1950, Creative Commons)
In some ways, it is beginning to feel like 1999 once again. Companies with sky-high valuations are being purchased because of their cool stories instead of their earnings or underlying fundamentals. When evaluating a stock, always look at what the numbers are telling you, and always ask yourself, “What unique product and/or service is this company offering that others need or want, and what is keeping the competition at bay?” (If it is your own company/idea, ask yourself the same thing!) These simple questions should allow you to make money from the mistakes of others—those who didn’t bother to do their own homework.
—Mike Hazell, Penn Wealth