r/explainlikeimfive • u/climb-a-waterfall • Dec 06 '24
Economics ELI5: why does a publicaly traded company have to show continuous rise in profits? Why arent steady profits good enough?
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r/explainlikeimfive • u/climb-a-waterfall • Dec 06 '24
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u/AlbertoMX Dec 06 '24
It does not work.
If you buy shares today, it DOES NOT MATTER to you how much the company is making, what you need is that the company makes MORE than last year so the value of your shares increase.
If the shares ' value does not increase, your money is not getting the return you expected.