A tale of 2 high flyers, Apple and Schlumberger

The stock market looks ever forward. As Legg Mason fund manager Bill Miller sometimes explains, your accuracy of projecting a company’s profits over the next year won’t help predict the company’s stock price one year hence. The stock price then will be based, instead, on what the market’s expecting for yet another year forward. In other words, as soon as a company reports quarterly earnings those earnings become irrelevant to the company’s stock price except as they shed light on future results. You can see just how right Miller is in the divergent reaction to strong earnings reports from oil services leader Schlumberger (Symbol: SLB) and iPod maker Apple (AAPL).

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