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How is that value determined though? It's just by what people think the stock is worth. If you have more money coming in to the market the listed companies' sto
by dh5 7y ago
How is that value determined though? It's just by what people think the stock is worth. If you have more money coming in to the market the listed companies' stocks will naturally be at a higher price point.
- perl4ever 7y agoCapital doesn't have to be invested in stocks, much less American ones.
- Accujack 7y ago>How is that value determined though? By the real profits of the companies in question according to standard accounting rules. It's not "perceived value" or "demand" or anything else that can be affected by speculation or hype. It's literally the units of money produced by the company that issued the stock. Buffet's rule of thumb says that ultimately the value matters. Investors and banks can play whatever games they like trading securities, building new financial instruments, speculation, etc, but ultimately the value of stocks is tied to the amount of money produced as profit, and eventually the market corrects. So far he's been right.