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> And I can use that price to turn my stocks into real, hard cash you can - but if good fraction of the stockholders were to lose hope and start selling stock
by ex_amazon_sde 6y ago
> And I can use that price to turn my stocks into real, hard cash
you can - but if good fraction of the stockholders were to lose hope and start selling stock the market value would evaporate into thin air very quickly.
OTOH if the value of those stocks was 80% backed by stable assets (production plants, building, land, gold, ...) it would evaporate much less quickly.
That fits the definition of virtual, speculation-based, value.
- smabie 6y agoI mean, in a lot of cases, it's backed by cash flow. I get what you're saying, but FAANG stocks aren't these pie in the sky high P/E kind of stocks: they are delivering insane revenue and gross profits.