2 ms·

On difference is dividends stock buybacks, and physical assets. Companies can support higher valuations buy owning more stuff, if their market cap is lower tha

On difference is dividends stock buybacks, and physical assets. Companies can support higher valuations buy owning more stuff, if their market cap is lower than the stuff they own, then they’re clearly underpriced. If a company starts paying out higher dividends due to higher profits, then their stock is worth more because otherwise the dividend repayment would trend towards zero (i.e. dividend payment per share ends up larger than the share price) If a company is doing stock buybacks, then they’re using their profits to prop up the price of their shares. But in all of these scenarios, the companies are producing profits, which are directly or indirectly used to pay for the increase is share value. Shitcoin on the other hand are zero sum, they produce no new value from their existence, they just store value and move it around a little bit.

solarkraft 4y ago
You're talking about current value - true, companies have that - but a huge part of stock prices are expected future value, which (by its nature) can be quite speculative.
- avianlyric 4y ago
  Well sure. But it’s substantially less speculative than shitcoins. Some degree of skill can be used to understand if a specific company is going to improve its situation long term via sound investments in new projects. You can look at companies stated goals and strategy and decide for yourself if those goals are valuable and if the strategy is viable. And thus make an educated call about future value (with appropriate error bars). With shitcoins there’s nothing to analysis. They fundamentally don’t do anything. Speculating on shitcoins is just trying to guess what a disorganised mass is going to do in the future. There’s no reasonable way to gain any understanding of what their behaviour is going to be, and if it’s going to increase or decrease the value of the shitcoin, because it’s a disorganised mess. Ultimately the value of a company present and future derived from the fact that it’s organised, and broadly predictable. Shitcoin value isn’t driven by anything organised, or predictable.
8note 4y ago
Owning stuff is a bit challenging though. Say Tesla has access to a bunch of Bitcoin; how much is Tesla worth as a result?

solarkraft 4y ago

You're talking about current value - true, companies have that - but a huge part of stock prices are expected future value, which (by its nature) can be quite speculative.

avianlyric 4y ago
Well sure. But it’s substantially less speculative than shitcoins. Some degree of skill can be used to understand if a specific company is going to improve its situation long term via sound investments in new projects. You can look at companies stated goals and strategy and decide for yourself if those goals are valuable and if the strategy is viable. And thus make an educated call about future value (with appropriate error bars). With shitcoins there’s nothing to analysis. They fundamentally don’t do anything. Speculating on shitcoins is just trying to guess what a disorganised mass is going to do in the future. There’s no reasonable way to gain any understanding of what their behaviour is going to be, and if it’s going to increase or decrease the value of the shitcoin, because it’s a disorganised mess. Ultimately the value of a company present and future derived from the fact that it’s organised, and broadly predictable. Shitcoin value isn’t driven by anything organised, or predictable.

8note 4y ago

Owning stuff is a bit challenging though. Say Tesla has access to a bunch of Bitcoin; how much is Tesla worth as a result?