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Aren't stocks worth more than their instantaneous value? I.E. I expect the value of stock A to grow at a better rate over time than stock B. If this type of thi
by cabaalis 7y ago
Aren't stocks worth more than their instantaneous value? I.E. I expect the value of stock A to grow at a better rate over time than stock B. If this type of thing ever comes about, I'd be very interested in how to control what is sold to cover a transaction.
- icinnamon 7y agoIn theory, the price of the stock should account for the future free cash flows of the underlying company, so the growth should be priced in. Any future growth at the end of the day is speculation.
- jldugger 7y ago> Aren't stocks worth more than their instantaneous value? I expect the value of stock A to grow at a better rate over time than stock B. Well, in theory stocks are valued based on their projected future performance. See also the efficient market hypothesis. Even if not true, there's no reason to think someone selling shares to cover purchases would have any insights on how to outperform.
- russell_h 7y agoNot really. The instantaneous value of a stock is established by buyers and sellers, both of whom are pricing in expected future performance. Maybe what you're getting at is that in this case the seller has no opportunity to set an asking price, and is simply accepting the current market value? If this really took off that would be an issue, but I can't see why this would take off.