Co-produced with Trapping Value
Equity values are based on cash flows over a long period of time. In other words, stocks have a very long duration (as implied by bond duration values). When you buy a company you are trying to own a multi-decade right to its cash flow. While events like the Coronavirus Pandemic can derail short-term cash flows, they don't change the long-term prospects significantly for a large swath of companies. Investors often forget that and focus on selling assets when times are tough and buying them when things look chirpy. That unfortunately