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Approaches to determining stock values vary, but fundamentally, each company judging itself undervalued is saying that its future stream of earnings justifies a higher price than the stock market is willing to accord it.

Investors have been too willing to buy stocks with strong reported earnings, even if they do not understand how the earnings are produced.

An increase in shareholder value can arise for reasons other than greater efficiency, such as increased power and the resulting ability to increase profits by raising prices.

I think you have to learn that there's a company behind every stock, and that there's only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.

With less competition to fear, companies are emboldened to raise their mark-ups and profits. That lifts share prices and thus the wealth of already wealthy shareholders.

Stocks change. Industries change. But the underlying reasons certain stocks are good investments remain the same. Only the fullness of time reveals which are the most sound.

For the most part, earnings and market value growth are a result of reduced expenses.

The value that some analysts put on revenue vs. what they put on profit is out of whack. If you can grow real cash earnings, that's 80% of what you ought to do, and the revenue component is 20%.

The stock market clearly values companies that can deliver disruptive innovation.