Today, it seems to be regarded as the duty of CEOs to make the stock go up.
That thinking has quietly changed how many companies are run. And not for the better.
A CEO is supposed to build a business. A real business. One that produces value, serves customers well, treats employees fairly, and earns profits honestly over time.
But when the scoreboard becomes the mission, strange things begin to happen.
Instead of asking, “How do we build a stronger company?”
Many begin asking, “How do we push the stock price higher this quarter?”
So they engineer headlines. They cut long term investment to polish short term numbers.
They buy back stock even when the price makes no sense. They promise growth that the business itself cannot naturally produce.
For a while, the market applauds. The stock rises. But reality is patient. It eventually shows up.
A stock price can be persuaded for a few quarters. A business cannot be fooled for long. If the foundation is weak, the results will eventually reveal it.
Great CEOs understand something simple that the market sometimes forget.
Their job is not to manage the stock price. Their job is to manage the business.
If they build a company with durable earnings, rational capital allocation, and a culture of integrity, the stock will take care of itself over time.
But when leaders chase the stock price itself, they often end up destroying the very thing that was supposed to create it.
In investing, the wise observer watches what management builds, not what they promise.
Because in the end, the market may vote in the short run, but it always weighs in the long run.
That thinking has quietly changed how many companies are run. And not for the better.
A CEO is supposed to build a business. A real business. One that produces value, serves customers well, treats employees fairly, and earns profits honestly over time.
But when the scoreboard becomes the mission, strange things begin to happen.
Instead of asking, “How do we build a stronger company?”
Many begin asking, “How do we push the stock price higher this quarter?”
So they engineer headlines. They cut long term investment to polish short term numbers.
They buy back stock even when the price makes no sense. They promise growth that the business itself cannot naturally produce.
For a while, the market applauds. The stock rises. But reality is patient. It eventually shows up.
A stock price can be persuaded for a few quarters. A business cannot be fooled for long. If the foundation is weak, the results will eventually reveal it.
Great CEOs understand something simple that the market sometimes forget.
Their job is not to manage the stock price. Their job is to manage the business.
If they build a company with durable earnings, rational capital allocation, and a culture of integrity, the stock will take care of itself over time.
But when leaders chase the stock price itself, they often end up destroying the very thing that was supposed to create it.
In investing, the wise observer watches what management builds, not what they promise.
Because in the end, the market may vote in the short run, but it always weighs in the long run.