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The big difference between BTC and MSFT/TSLA is that successful companies have cash flow. MSFT has a dividend that it pays out every year. TSLA is eliminating d
by gitfan86 5y ago
The big difference between BTC and MSFT/TSLA is that successful companies have cash flow. MSFT has a dividend that it pays out every year. TSLA is eliminating debt and adding cash to its balance sheet.
If everyone stopped buying BTC and only held BTC and bought another crypto currency, BTC would go to zero since no one would be putting money in. Similar to a pyramid scheme, once there is no new money it collapses.
On the other hand, if investors decided to never buy MSFT again and sold their stock the price could go down a lot, but it couldn't go to zero because that would make the dividend yield go to infinity. If MSFT went down to $20/share it would yield over 10% a year, and it is absurd to think that no one would want to get 10% a year return.
Obviously companies can and do go bankrupt, but for this comparison I'm comparing successful crypto to successful companies.
- tata71 5y agoIf every new person being born started using cryptocurrency and refused to use USD, since there is no new money, it collapses.
- gitfan86 5y agoExactly, currencies have no cashflow. They can go up and down relative to many other things, but essentially their only value is if other people are willing to trade for other things with them.
- tata71 5y ago...the next generation trusted DOGE to the tune of 900%+ growth this year. It feels foolish to be long USD at the moment.
- somethoughts 5y agoSorry for the late reply - yeah I was mostly talking about 2008 negative income TSLA when they only made the Tesla roadster, and no income MSFT when they made Windows 3.1 and their PE ratio was 80. Perhaps its better to throw in some growth stocks that ended up not being particularly amazing such as WeWork, Evernote, Zynga, etc. All had low stock float, no/negative income and so were trading on emotion.
- skinnymuch 5y agoWeWork went public this week. Zynga is the big example used all the time as a huge failure. When it isn’t so bad. Evernote isn’t public. It’s been down hill for a while. Are you talking secondary markets?