5 ms·
A lot of people will rather own a third of Apple, but the market, thus by extension, most people who actually invest, think that Nvidia is worth a third of Appl
by osti 3y ago
A lot of people will rather own a third of Apple, but the market, thus by extension, most people who actually invest, think that Nvidia is worth a third of Apple, on last Friday at least.
- Nifty3929 3y agoNo, that is not at all what it means - that’s my point. All of Nvidia was not purchased in Friday, and neither was 1/3 if Apple. We don’t really know what those things are worth, because we do not have such a transaction. To base that on. All we know is what a bunch of individuals would buy or sell a small number of shares for. Very different.
- suddenclarity 3y agoI think it's a lost cause. People don't want to understand. It would shatter their worldview on both net worth of the rich (you can't tax imaginary money) and their own net worth.
- osti 3y agoMarket value is a basis for most modern accounting and finance theory, so there isn't anything outrageous about it, otherwise people would have changed how finance is taught long ago.
- Nifty3929 3y agoMarket cap isn’t a bad measurement per se, it just doesn’t mean what people think it means sometimes. Or they use it wrong.
- Nifty3929 3y ago+1 on the net worth thing too…
- osti 3y agoBut fact is, there are many cases where one investor tries to buy the whole company, the investor has to pay a premium over what the market currently values it at (Musk buying Twitter for example). So the current market price is a good approximation for what its real value is. Unless you think you know better than what our modern finance theory says, then I don't think your point is valid at all.