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The S&P 500 performs about a half a trillion dollars a year in stock buybacks, funded by corporate profits, in addition to their roughly half a trillion dollars

The S&P 500 performs about a half a trillion dollars a year in stock buybacks, funded by corporate profits, in addition to their roughly half a trillion dollars a year in dividends, because people are happier when numbers go up.

yieldcrv 4y ago
none of the daily or weekly marketcap changes have anything to do with the equivalent amount of money changing hands you also have said nothing to the contrary basically the commonality is that you two are attempting to have a conversation on differences valuation models, when this isn't a conversation on valuation models. everyone understands that this is thinly veiled copypasta for why you respect one asset class and don’t respect another asset class, some people love to read that stuff but this isn’t what this conversation is about. its a conversation on float and what float does and does not convey. the limitations of what float can convey is the same across all asset classes which is that the last traded price of a small portion of the supply is multiplied by the total supply, and this does not factor in how much could be sold at that price and does not factor in how the buyer and seller agreed upon that price or if there was any pricing projections or valuation metrics involved at all.
- saalweachter 4y ago
  Someone spending 0.5 crypto-market-caps buying stock doesn't affect stock prices and market caps?
- notahacker 4y ago
  > the limitations of what float can convey is the same across all asset classes which is that the last traded price of a small portion of the supply is multiplied by the total supply, and this does not factor in how much could be sold at that price and does not factor in how the buyer and seller agreed upon that price or if there was any pricing projections or valuation metrics involved at all. The limitations of what float can convey may be the same across all asset classes, but other asset classes do not suffer the limitation that there is no source of value except for the float. A corollary of this is that market caps of stocks, bonds or commodities may reflect valuation metrics other than Greater Fool Theory.
  - yieldcrv 4y ago
    > A corollary of this is that market caps of stocks, bonds or commodities may reflect valuation metrics other than Greater Fool Theory. That’s true for some crypto assets as well. So in a conversation about float you should stick to float.
    - notahacker 4y ago
      > That’s true for some crypto assets as well. > So in a conversation about float you should stick to float. It is true that in some crypto assets value can be realised as claims to the sort of value the OP said they understood, like future revenues of a business (or "DAO"), instead of solely by finding buyers for the crypto. But it is not true for the typical "insular, self-contained" cryptocurrency they sought to contrast it with, in which the market cap can be realised solely by sufficiently deep-pocketed Greater Fools purchasing the float. In a conversation about the fundamental weirdness of assets whose value can only be realised by float, one probably should stick to assets whose value can only be realised by float.
      - yieldcrv 4y ago
        So you acknowledge the strawman argument of valuation, used to discredit the initial point about how marketcaps change when crypto is involved, and then we both agree that the strawman argument cant even be reliably used to discredit the initial point, but then you double down on the only times it can anyway? Just for the sake of a reply? Well good chat. I hope it is insightful to someone that passes by.
        notahacker 4y ago
        The only strawman argument of valuation was you dismissing the OP's perfectly sensible doubts about whether $1T of legal claim to business with actual physical capital and profit expectations was truly equivalent to $1T of cryptographic strings valued because number go up by pointing out technically, their market caps were both calculated in the same way, as if nobody should ever consider fundamentals or how much of the market cap of assets of the respective classes could be realised in a selloff (or indeed how much wash trading took place to completely fake market cap) But yes, your persistence in insisting the conversation should be about what you care about, and not about the original subject matter got me to acknowledge that some cryptoassets - which are unlike the high profile, high market cap unbacked cryptoassets the OP was talking about - imitate stocks and may generate future revenue streams from selling things other than tokens. Glad you enjoyed that bit. I do hope the insight passers by come away with isn't that DAOs and stocks have equally strong legal claims and rosy expectations and float is all that matters though.

yieldcrv 4y ago

none of the daily or weekly marketcap changes have anything to do with the equivalent amount of money changing hands you also have said nothing to the contrary basically the commonality is that you two are attempting to have a conversation on differences valuation models, when this isn't a conversation on valuation models. everyone understands that this is thinly veiled copypasta for why you respect one asset class and don’t respect another asset class, some people love to read that stuff but this isn’t what this conversation is about. its a conversation on float and what float does and does not convey. the limitations of what float can convey is the same across all asset classes which is that the last traded price of a small portion of the supply is multiplied by the total supply, and this does not factor in how much could be sold at that price and does not factor in how the buyer and seller agreed upon that price or if there was any pricing projections or valuation metrics involved at all.

saalweachter 4y ago
Someone spending 0.5 crypto-market-caps buying stock doesn't affect stock prices and market caps?
notahacker 4y ago
> the limitations of what float can convey is the same across all asset classes which is that the last traded price of a small portion of the supply is multiplied by the total supply, and this does not factor in how much could be sold at that price and does not factor in how the buyer and seller agreed upon that price or if there was any pricing projections or valuation metrics involved at all. The limitations of what float can convey may be the same across all asset classes, but other asset classes do not suffer the limitation that there is no source of value except for the float. A corollary of this is that market caps of stocks, bonds or commodities may reflect valuation metrics other than Greater Fool Theory.
- yieldcrv 4y ago
  > A corollary of this is that market caps of stocks, bonds or commodities may reflect valuation metrics other than Greater Fool Theory. That’s true for some crypto assets as well. So in a conversation about float you should stick to float.
  - notahacker 4y ago
    > That’s true for some crypto assets as well. > So in a conversation about float you should stick to float. It is true that in some crypto assets value can be realised as claims to the sort of value the OP said they understood, like future revenues of a business (or "DAO"), instead of solely by finding buyers for the crypto. But it is not true for the typical "insular, self-contained" cryptocurrency they sought to contrast it with, in which the market cap can be realised solely by sufficiently deep-pocketed Greater Fools purchasing the float. In a conversation about the fundamental weirdness of assets whose value can only be realised by float, one probably should stick to assets whose value can only be realised by float.
    - yieldcrv 4y ago
      So you acknowledge the strawman argument of valuation, used to discredit the initial point about how marketcaps change when crypto is involved, and then we both agree that the strawman argument cant even be reliably used to discredit the initial point, but then you double down on the only times it can anyway? Just for the sake of a reply? Well good chat. I hope it is insightful to someone that passes by.
      - notahacker 4y ago
        The only strawman argument of valuation was you dismissing the OP's perfectly sensible doubts about whether $1T of legal claim to business with actual physical capital and profit expectations was truly equivalent to $1T of cryptographic strings valued because number go up by pointing out technically, their market caps were both calculated in the same way, as if nobody should ever consider fundamentals or how much of the market cap of assets of the respective classes could be realised in a selloff (or indeed how much wash trading took place to completely fake market cap) But yes, your persistence in insisting the conversation should be about what you care about, and not about the original subject matter got me to acknowledge that some cryptoassets - which are unlike the high profile, high market cap unbacked cryptoassets the OP was talking about - imitate stocks and may generate future revenue streams from selling things other than tokens. Glad you enjoyed that bit. I do hope the insight passers by come away with isn't that DAOs and stocks have equally strong legal claims and rosy expectations and float is all that matters though.