Upside

Categories: Investing, Metrics

Next time you see one of those idiots fast-stabbing a knife between his spread fingers on a wood table at a bar, you have to ask, "Dude. What's the upside?"

Yeah. So...investors care a lot about the upside, usually reflected as a price against what the downside costs. That is, they're investing in a company with $1 in earnings this year, but they're paying $50 a share. Well, the downside is that the company doesn't, in fact, print $3 a share next year, making that $50 look cheap. Instead, they print $1.50 and the stock trades down $15 or so. The upside is that the company really does print $3, then $5 the next year, when the stock is likely well over $100 a share. No bloody fingers.



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