[tlb]

You’re free to invest that way if you want. You might one day wake up and wonder why your Blockbuster Video shares did so badly. But Netflix seemed way overpriced.

Investing in future prospects encourages companies to plan for the future, rather than extract what they can from the present. The stock price is a big motivation for execs, so they can only invest in R&D if the market understands why it makes sense to spend money now in expectation of future profits.