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> The market cap for UNH isn't calculated using future cash flows. Yes it is... > The market cap for any security, by definition, is price-per-security numbe

> The market cap for UNH isn't calculated using future cash flows. Yes it is... > The market cap for any security, by definition, is price-per-security number-of-securities.* How do you think you get the price-per-security for a stock? If Apple has $100B in cash, why is their Market Cap $1.2T? This is why people are skeptical of most things crypto... it really seems like there's hardly anyone in the community who understand fundamental financial concepts. > You can argue that asset prices should be derived from future cash flows, and hence, both Bitcoin and gold should be almost worthless. No - I'd just argue that it's completely misleading to try and assign a "market cap" to any asset other than a security and that people who rely on them are doing so to mislead rather to inform.

johnwheeler 7y ago
Again, market cap _is_ price per share multiplied by shares outstanding. In practice, the amount of cash a company has has nothing to do with its market capitalization. There are companies with low cash, major debt, and sky high valuations. Stocks are supposed to be valued by discounted cash flows, but that doesn’t mean they are, by any means. The future values of companies are highly subjective. Technically, cash doesn’t factor into future cash flows so much as it does book or liquidation value. > This is why people are skeptical of most things crypto... it really seems like there's hardly anyone in the community who understand fundamental financial concepts. I would argue one reason people are skeptical (annoyed is probably a better word) of crypto because it is full of folks who purport to know fundamental and even advanced financial concepts who are actually deluding themselves.