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People work at companies to actually do something useful. The money that investors take out is mostly earned from customers who paid for a product or service th
by sp332 4y ago
People work at companies to actually do something useful. The money that investors take out is mostly earned from customers who paid for a product or service they thought was worth more than the price they paid. Returns on stock market investments are not mostly taken from other investors' invested money. And NASDAQ is still above its 2019 peak.
- AnonC 4y ago> The money that investors take out is mostly earned from customers who paid for a product or service they thought was worth more than the price they paid. Returns on stock market investments are not mostly taken from other investors' invested money. I don’t agree with these points, having seen loss making companies have sky high valuations and stock prices (see Amazon in its first decade and a half, Netflix, and some more companies that had or have a large negative P/E ratio). Companies being profitable is not a requirement for stock prices to go up. It’s been all about how much a company can grow revenues (taken as a proxy of increased market share) even if it’s losing money.