With regard to stocks, Keynes noted that no one knows for sure what will influence future earnings’ prospects and dividend payments. As a result, he said, most people are “largely concerned, not with making superior long-term forecasts (for) an investment over its whole life, but with foreseeing changes in the conventional basis of valuation a short time ahead of the general public.” Keynes, in other words, applied psychological principles rather than financial evaluation to the study of the stock market.
