Ask yourself, how much should you pay for Google…

Ask yourself, how much should you pay for Google stock today? Do you have a 30 year time horizon? Then the smart price to pay involve a sober analysis of Google’s discounted cash flow over the next 30 years. An iron rule of finance is that money chases returns to the extent that it can. Bubbles form when the momentum of short-term returns attracts enough money that the make up of investors shift from mostly long-term to mostly short term. That process feeds on itself. As traders push up short term returns, they attract even more traders. Before long and it often doesn’t take long, the dominant market price setters with the most authority are those with short time horizons.

— from The Flight Plan (Purpose/Wisdom/Risk) · The Psychology of Money By Morgan Housel

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