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Its a better metric than marketcap. Marketcap is just what a few people are willing to pay for shares, literally the one person at the auction house that bid hi
by vmception 6y ago
Its a better metric than marketcap. Marketcap is just what a few people are willing to pay for shares, literally the one person at the auction house that bid higher than others and got SOLD to, except in the stock market everyone pretends to multiple that 1 share by the other 4.28billion and act like its an indicator of value.
Whereas net income shows what MANY people bought, and how the company is able to keep a bunch leftover.
And regarding "good", it's a good metric for value creation and the infrastructure for independence, as this has been unachievable before and always required a monopoly on power derived from the entire social contract of society and force. So it is merely interesting for it to occur in the absence of those things. It is not a comment on "good" in terms of society and whether the social contract should include a way to limit them, it doesn't factor that in at all.
- 3pt14159 6y agoIt is an excellent indicator of value. Every single share holder could have been the person to have sold the share, but they choose not to. Yes, HOLD is different than BUY, but in terms of what a company is actually valued at market cap is an extremely good source of information. It values in information about future trends from a sea of market participants. There is a reason Amazon and Apple have very different price to earnings numbers.