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1.
What will drive the price of a company's stock the most over the long term?
The future profits and cash flow a company can generate. The future profits a company can generate will drive the price of its stock over the long term. Over the short term, any number of factors may influence a company's stock price.
2.
Investors have loads of tools at their disposal for analyzing the markets. Therefore, it is correct to say that _______.
We still cannot consistently and accurately predict market movements. No one has yet predicted the market consistently and accurately; there are too many unknowns. Still, we continue to try.
3.
As a stock investor, what should you pay the most attention to?
A company's competitive positioning. You should pay the most attention to a company's competitive positioning, which in turn will determine future profits.
4.
Which of the following is the most important driver of a company's future profits?
Its competitive positioning. Competitive positioning will ultimately drive future profits, which in turn will drive the company's stock price.
5.
To be a successful stock investor, you need _______.
Patience and the ability to think about future trends. Remember that successful stock investing is like chess, where thought, patience, and the ability to peer into the future are rewarded. Stock investing is not about trading.
