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The way I read his comment was a difference between perceived value and actual value. Market share is equivalent to perceived value, not actual value. So the co
by curun1r 11y ago
The way I read his comment was a difference between perceived value and actual value. Market share is equivalent to perceived value, not actual value. So the comment was remarking that the drop in share price could be the result of inflated expectations becoming more realistic rather than a loss of actual value of the company.
The biggest difference between perceived and actual value that I'm aware of is the tulip mania that early 1600s. In hindsight, it's pretty obvious that flowers didn't become less valuable in the short time period between the height and the collapse. Any utility or purpose they had, other than resale, was retained in its entirety. But the price difference was massive. There are many who believe we're in our own era of unicorn mania where it will become apparent, again in hindsight, that they were never as valuable as people made them out to be.
- stcredzero 11y agoThe biggest difference between perceived and actual value that I'm aware of is the tulip mania that early 1600s. In hindsight, it's pretty obvious that flowers didn't become less valuable in the short time period between the height and the collapse. Any utility or purpose they had, other than resale, was retained in its entirety. This wouldn't apply to Bitcoin. Any utility or purpose in a bitcoin is entirely in terms of its perceived value.
- hueving 11y agoWhat are you talking about? The value to the people is what they will pay for it. If nobody is buying it at a certain price, then there is nobody that feels it has value at or above that price. There is no 'real value' of something vs its market value.
- avalaunch 11y agoI think the distinction being made is the value of the stock vs the value of the company, which is not always perfectly in sync. That's why, at any given time, a stock can be undervalued or overvalued. For example, I think you'd be hard pressed to state that the value of a stock right before a company announces unexpected losses is representative of the actual value of the company. The perceived value, prior to the announcement, is too high.
- curun1r 11y agoSometimes things have an intrinsic value, often because of some utility that they provide. Sometimes the only value is the belief that someone else will pay more for it. [1] When it's the latter there's a difference between the real value and the perceived value. This is why we use the term "correction" to describe a situation where the perceived price falls to match the "correct" price. [1] https://en.wikipedia.org/wiki/Greater_fool_theory https://en.wikipedia.org/wiki/Greater_fool_theory