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A share is fractional ownership of the underlying company and all it's assets - that is what gives it value. A "cryptocurrency" is merely worth what someone el

A share is fractional ownership of the underlying company and all it's assets - that is what gives it value. A "cryptocurrency" is merely worth what someone else is willing to pay (hence speculative).

chatmasta 8y ago
No, what gives a share value is that someone else is willing to buy it from you for a certain price. The fact that it represents fractional ownership is why someone is willing to pay a certain price to buy it from you. But fundamentally, the value only exists as long as there is a counterparty.
- guntars 8y ago
  Yes, yes, and cash only has value because someone else is willing to give you something for it. Congrats, you've realized that it's all made up and nothing is fundamentally valuable!
- xoa 8y ago
  >No, what gives a share value is that someone else is willing to buy it from you for a certain price. What the heck? This is absolutely wrong. The fundamental basis of the value of a share is that it results in gaining a portion of the company's profits. The company makes money and then pays some of that out to shareholders. Even companies that make zero money now have shares valued at least in part on expectations of what money they might make in the future. Sure, humans are obviously not perfect at anticipating and researching and calculating all this by any means. We are not homo economicus either. There is room for irrationality, for misjudgements, etc. But even with all that shares are just that, shares. The actual ownership of a public company is about shares (yes, there can be different classes in some cases). They represent power and returns, even if it's decentralized. So a share does in fact have an innate value in terms of the actual cash it can spin off for a shareholder and the input to the company it gives them. Multipliers will vary based on risk and future projections and such, but it's perfectly possible to hold a lot of boring stocks that may not grow much but just print money, consistently, year after year with minimal management. This is not at all the same as cryptocurrencies or any pure asset, where what you ultimately get from it depends purely on what someone else will pay you for it.

chatmasta 8y ago

No, what gives a share value is that someone else is willing to buy it from you for a certain price. The fact that it represents fractional ownership is why someone is willing to pay a certain price to buy it from you. But fundamentally, the value only exists as long as there is a counterparty.

guntars 8y ago
Yes, yes, and cash only has value because someone else is willing to give you something for it. Congrats, you've realized that it's all made up and nothing is fundamentally valuable!
xoa 8y ago
>No, what gives a share value is that someone else is willing to buy it from you for a certain price. What the heck? This is absolutely wrong. The fundamental basis of the value of a share is that it results in gaining a portion of the company's profits. The company makes money and then pays some of that out to shareholders. Even companies that make zero money now have shares valued at least in part on expectations of what money they might make in the future. Sure, humans are obviously not perfect at anticipating and researching and calculating all this by any means. We are not homo economicus either. There is room for irrationality, for misjudgements, etc. But even with all that shares are just that, shares. The actual ownership of a public company is about shares (yes, there can be different classes in some cases). They represent power and returns, even if it's decentralized. So a share does in fact have an innate value in terms of the actual cash it can spin off for a shareholder and the input to the company it gives them. Multipliers will vary based on risk and future projections and such, but it's perfectly possible to hold a lot of boring stocks that may not grow much but just print money, consistently, year after year with minimal management. This is not at all the same as cryptocurrencies or any pure asset, where what you ultimately get from it depends purely on what someone else will pay you for it.