McKinsey on Finance, Number 58

As important as it is to secure the right terms for a shared enterprise, it is just as critical to form a sustainable relationship.

Announcement effects are a good instant measure of market sentiment but a poor indicator of longer-term value creation.

Differences in the market’s response to deal announcements reflect how deals are funded as much as expected performance.

Some actions that boost earnings per share don’t create value for shareholders. Share repurchases are generally a wash.

Short-term measures of volatility can fluctuate wildly. But over the long term the market has been remarkably stable.