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How can it be a bubble? Their money isn't based on investments that hope for future earnings, but from their own yearly, insane profits.
by klbarry 16y ago
How can it be a bubble? Their money isn't based on investments that hope for future earnings, but from their own yearly, insane profits.
- michaeldhopkins 16y agoIf the group coupon concept is a fad but valued by investors as something more, than the concept is a bubble.
- michaeldhopkins 16y agoWhy the downvote? Companies are priced based on potential earnings as well as actual earnings. For example, the potential earnings of collateralized mortgages were thought to be high, so the companies that owned them were priced to account for that. When it turned out that owning CMOs was a bad business model, the companies' market values dropped, costing investors money. And, there is no difference between people stopping mortgage payments and people stopping coupon purchases when it comes to earnings projections.