4 ms·
Traditionally, the value of a security is a prediction of its future cashflow to perpetuity discounted by a capitalisation rate. While it is true that some secu
by Alpha3031 4mo ago
Traditionally, the value of a security is a prediction of its future cashflow to perpetuity discounted by a capitalisation rate. While it is true that some securities these days are sold as something not dependent on future cash flows, and insiders are paid off by selling something misleading to retail investors, that is known as a Ponzi scheme and is traditionally prohibited by securities regulations.
- skybrian 4mo agoPredictions aren’t physical and can be wrong.
- Alpha3031 4mo agoThere is nothing physical about any financial transaction (except some electrons moving I guess), that doesn't mean that they aren't supposed to approximate something that happens in physical reality. A billion dollars is control.
- skybrian 4mo agoYes, the transactions are real, but trades are based on speculation and market cap is an extrapolation of much smaller trades. The transactions are just as real for Bitcoin or a meme stock.