Friday, July 27, 2007

Two Days in a Row of DJ Index Drop Greater than 200 points

Even though reports of last quarter's growth of the US and World economies were above average, the DJ dropped. Remember how businesses are valued, which is on the present value of future cash flow. The recent drop suggests that investors believe that current prices overstate value.

The "so what" to me is that business managers who create real value above expectations will be rewarded greatly.