No ‘Intelligence or Emotional Stability’ Required: Warren Buffett Warns Short-Term Markets Are a ‘Voting Machine,’ But Eventually Reflect Reality
Yahoo Finance·2025-12-19 16:54

Core Insights - The article emphasizes that stock prices and business value often diverge, particularly during periods of market volatility and innovation, such as the current interest in artificial intelligence [1][6][15] - It highlights that established companies with strong fundamentals may see their stock prices stagnate or decline due to market sentiment, despite their underlying business strength [1][9][12] Company Examples - Coca-Cola (KO): The stock experienced a significant drop of over 50% within a year of its IPO in 1919, but ultimately compounded into over $2.1 million by 1993, and projected to reach $29.4 million by December 2025 [5][6] - United Parcel Service (UPS): Despite improvements in operational efficiency and margins, UPS shares have not appreciated since pre-pandemic levels, reflecting a disconnect between business fundamentals and market perception [9][10][11] - Procter & Gamble (PG): The company faces valuation pressure due to investor rotation towards faster-growing sectors, yet continues to deliver consistent cash flow and dividend growth, illustrating the divergence between share performance and business fundamentals [12][13] - PayPal (PYPL): The company has seen a decline in share price amid growth concerns, but remains profitable and generates significant free cash flow, indicating that market skepticism may not reflect its underlying earnings power [14][15]