If the last 5 years has taught me anything, it is that stock prices are completely divorced from the realities of the fundamentals of business. It is a clown economy and more like a casino then an honest measure of what a stock is worth. Especially with tech.
AI is way overhyped, to a level we perhaps have never seen before, but I would not expect the stock prices too reflect that.
Look at Tesla. The intrinsic value was no more than 10 billion before he started sieg heiling on national TV and alienated half of the western world.
What will continue to drive the stock prices is the support or acquiescence of governments to it. Do you the United States and the rest that follow.
but I would not expect the stock prices too reflect that.
Agreed. One rule of the stock market is that while it might theoretically rely on sound fundamentals, it can stay irrational longer than you (or anyone) can stay solvent. It will inevitably fall screaming towards reality eventually, but there’s no guarantee it will happen within any reasonable timeframe and expecting it to is dangerous. It’s a rigged casino, the house always wins, and when they don’t their goons will grab you when you try to leave. At this point the billionaires own pretty much the entire house, and their goons are running the world’s largest military and police state. “Invest” at your own risk.
I think there is a fundamental difference now, the government has bailed out stocks twice in 2008 and 2020. Moved Heaven and Earth with the fed and indirect injections of capital to prevent the rich from losing money. So these stock prices reflect tax dollars billing them out in the downturn.
Why bother worrying about the downturn if the world bends over backwards to stop you hitting the ground?
It is basically impossible for Visa to go bankrupt, for example. The moment the threat looms, governments are going to leap in and save them. They’re too big to fail.
The price isn’t based on what the company is worth, it’s based on what people think the company will be worth in the future. Clearly, a lot of people believe that truly autonomous vehicles are just around the corner, and AI is going to revolutionise everything.
They’re most likely wrong, but it will take a long time for the market to accept that.
No rational person would think that Tesla would command the majority of that market of autonomous vehicles, robots, or whatever. Especially not after their Flagship truck turned out to suck in like 20 different ways.
it’s based on what people think the company will be worth in the future
Not a single person in their right mind thinks that Tesla will ever be worth its current $1.3T market cap. Stock price is based on whether the market movers (not you or I) think that the price will be higher or lower a few weeks/months from now, that’s it. The actual intrinsic value/worth of the company makes no difference.
There’s enough people who genuinely believe the company is worth that to keep the value high for a very long time.
I don’t think there are. I just think there are a lot of people who believe they’re going to be able to get in and out before the Tesla bubble pops. Actual, realistic value of the company has nothing to do with it.
If the last 5 years has taught me anything, it is that stock prices are completely divorced from the realities of the fundamentals of business. It is a clown economy and more like a casino then an honest measure of what a stock is worth. Especially with tech.
AI is way overhyped, to a level we perhaps have never seen before, but I would not expect the stock prices too reflect that.
Look at Tesla. The intrinsic value was no more than 10 billion before he started sieg heiling on national TV and alienated half of the western world.
What will continue to drive the stock prices is the support or acquiescence of governments to it. Do you the United States and the rest that follow.
Agreed. One rule of the stock market is that while it might theoretically rely on sound fundamentals, it can stay irrational longer than you (or anyone) can stay solvent. It will inevitably fall screaming towards reality eventually, but there’s no guarantee it will happen within any reasonable timeframe and expecting it to is dangerous. It’s a rigged casino, the house always wins, and when they don’t their goons will grab you when you try to leave. At this point the billionaires own pretty much the entire house, and their goons are running the world’s largest military and police state. “Invest” at your own risk.
I think there is a fundamental difference now, the government has bailed out stocks twice in 2008 and 2020. Moved Heaven and Earth with the fed and indirect injections of capital to prevent the rich from losing money. So these stock prices reflect tax dollars billing them out in the downturn.
Why bother worrying about the downturn if the world bends over backwards to stop you hitting the ground?
It is basically impossible for Visa to go bankrupt, for example. The moment the threat looms, governments are going to leap in and save them. They’re too big to fail.
It’s gambling on who might stumble on AGI, not building anything.
The price isn’t based on what the company is worth, it’s based on what people think the company will be worth in the future. Clearly, a lot of people believe that truly autonomous vehicles are just around the corner, and AI is going to revolutionise everything.
They’re most likely wrong, but it will take a long time for the market to accept that.
No rational person would think that Tesla would command the majority of that market of autonomous vehicles, robots, or whatever. Especially not after their Flagship truck turned out to suck in like 20 different ways.
As someone on r/Wallstreetbets once said, I can stay irrational longer than you can stay solvent.
Not a single person in their right mind thinks that Tesla will ever be worth its current $1.3T market cap. Stock price is based on whether the market movers (not you or I) think that the price will be higher or lower a few weeks/months from now, that’s it. The actual intrinsic value/worth of the company makes no difference.
As someone on r/Wallstreetbets once said, I can stay irrational longer than you can stay solvent.
There’s enough people who genuinely believe the company is worth that to keep the value high for a very long time.
I don’t think there are. I just think there are a lot of people who believe they’re going to be able to get in and out before the Tesla bubble pops. Actual, realistic value of the company has nothing to do with it.
“greater fool” theory. Just gotta get out and leave someone else holding the bag. Easy to see with crypto rugpulls.
That’s also a possibility.