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>The only reason people make money off of stocks is because at the end, someone gives those companies money. Small quibble. The reason why people make money of
by bumby 10mo ago
>The only reason people make money off of stocks is because at the end, someone gives those companies money.
Small quibble. The reason why people make money off stocks is largely because people think people will give those companies in the future. People aren’t just trading on dividends, they’re trading on PE ratios.
Otherwise, companies like Tesla would be worth much less than Toyota (which gets more revenue, higher gross profit, and higher profit margins).
- ActorNightly 10mo agoTrue, but a company has to be shown to actually make things that people want. If Tesla didn't sell cars or sold very little, they won't be hyped up as much as they are now.
- bumby 10mo agoI think if you look at the numbers, it doesn’t make sense. For Toyota to have a similar market cap at their current PE, they would need to sell something like 95% of the total cars worldwide. So unless people think Tesla will have a worldwide automotive monopoly, they are paying for something other than what they’re doing with cars.