4 ms·
There has to be some basis for valuation. If you buy a stock, not because you expect it to pay something but because you expect someone to pay more later for th
by benj111 4y ago
There has to be some basis for valuation. If you buy a stock, not because you expect it to pay something but because you expect someone to pay more later for the same reason you don't have investment. You have speculation.
Yes there are other methods for distributing profits (stock buy backs) but unless you're saying it's a massive Ponzi scheme, then the value has to come from something real.
- fragmede 4y agoThe market can stay irrational far longer than you can stay solvent. What the years of free money proved is that the points are made up anyway. If you stayed playing the old game of PE ratios and market fundamentals you lost out on a ton of gainz in years past other than this one. The value comes down to how much the next sucker is winning to pay for what you're selling.
- benj111 4y agoJust because the market is irrational, doesn't mean you have to be. To bastardise buffet. I'd much rather everyone else gorge themselves on hotdogs so I can have my favourite burger restaurant to myself. When they come to their senses I will have to pay more for my burgers, if I can even get a seat in the restaurant. 'gainz' are only 'gainz' when you come to sell, and I have more confidence that something that I bought at current inherent value will maintain that value when I want to sell, compared to something with no inherent value.